Sara has $40 in her budget. Given the following graph, what is the MRS of her...

Question

Question

Sara has $40 in her budget. Given the following graph, what is the MRS of her optimal consumption bundle? Burritos 8 Pizza 2

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

At the optimal bundle, Sara consumes 4 burritos and 2 pizzas.

Looking at her budget line, she may spend all her money on 8 burritos, or on 4 pizzas. Thus, she is indifferent between 8 burritos and 4 pizzas

We need at least two sets of points to calculate MRS. Three such baskets are:

(8 burritos, 0 pizzas)

(4 burritos, 2 pizzas)

(0 burritos, 4 pizzas)

--

From the baskets above, her MRS is:

2 burritos for 1 pizza or,

1 burrito for 0.5 pizza

Add a comment

Answer 2

Similar Homework Help Questions

Sara has $40 in her budget. Given the following graph, what is the MRS of her...

Sara has $40 in her budget. Given the following graph, what is the MRS of her optimal consumption bundle? Burritos Pizza 4
Atlas has $50 in their budget. Given the following graph, what is the MRS at his...

Atlas has $50 in their budget. Given the following graph, what is the MRS at his optimal consumption bundle? Burritos 10N Pizza -5
1. answer it only numerical values. 2. A person has a Cobb Douglas utility function for...

1. answer it only numerical values. 2. A person has a Cobb Douglas utility function for two goods X and Y. If the price of a X increases and the budget stays the same, the utility maximizing person __________. Cannot be determined from the information will consume less of Y will only consume Y will consume less of both goods will have lower utility Sara has $40 in her budget. Given the following graph, what is the MRS of her...

1. Megan has $50 in their budget. Given the following graph what's the MRS at her...

1. Megan has $50 in their budget. Given the following graph what's the MRS at her optimal consumption bundle? 2. The demand curve for airplanes is: Qc=15,000 - .2Pc - 800Pg where Qc is the quantity of airplanes, Pc is the price of airplanes and Pg is the price of gasoline. By what quantity does the demand for airplanes change if the price of gasoline goes down by $.50? a) 400 b) 800 c) -400 d) -800 e) Can’t be...
5) Ana has $40. She wants to spend all her money on pizza and Amazon Video...

5) Ana has $40. She wants to spend all her money on pizza and Amazon Video rentals. Assume that the price of a pizza is $8 and that the rental price of a streaming video is $4. a) Complete the table below Number of Pizzas Total Utility (TU) Marginal Utility (MUR) Marginal Utility Per Dollar (Pp = $8) Number of Video rentals (Ove Total Utility (TUV) Marginal Utility (MUR) Marginal Utility Per Dollar (PUR = $4) 0 NO 888 8...
Alice has a fixed budget of $120 to purchase two goods. Let X and Y represent...

Alice has a fixed budget of $120 to purchase two goods. Let X and Y represent the quantity of goods X and Y purchased respectively. Price of X is $2, price of Y is $1, and her utility function is U= X2Y and her MRS = 2Y/X Write down the budget line function Write down the tangency condition Calculate the optimal consumption bundle (X= Y= ) Draw a graph to show you results (including budget line, utility, and optimal consumption...

Bob has $36 to spend on tacos and burritos which are both ordinary goods for Bob....

Bob has $36 to spend on tacos and burritos which are both ordinary goods for Bob. Burritos cost $4 each and tacos cost $2 each. a. Draw Bob's budget line with tacos on the x-axis and burritos on the y-axis. b. Draw an indifference curve showing Bob's optimal consumption at 5 burritos and 8 tacos. c. What is the ratio of the Marginal Utility of Burritos to the Marginal Utility of Tacos at Bob's optimal consumption bundle? d. On the...
d) Assume the budget is back at 40$, but the price per slice of pizza is...

d) Assume the budget is back at 40$, but the price per slice of pizza is now 6$. Find the optimal consumption bundle. 6) Assume you are looking at the market for cars. a) Assume the price of steel goes up. Show in a graph what happens and identify what happens to equilibrium prices and quantities. b) Assume the price of motorcycles goes down. Show in a graph what happens and identify what happens to equilibrium prices and quantities. Focus...
Refer to the graph below for the questions 2a-2f). Wolfie consumes pizza and soda and the...

Refer to the graph below for the questions 2a-2f). Wolfie consumes pizza and soda and the graph illustrates his indifference curves. 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Pizza 2. a) Suppose Wolfie has an income of $24, that Ppizza = $2, and that Psoda = $2. Draw Wolfies budget constraint in the above figure. What is the opportunity cost of one more slice of pizza? b) At this...

Anna spends all her income on wine (good 1) and cheese (good 2). Her utility function...

Anna spends all her income on wine (good 1) and cheese (good 2). Her utility function is u(x1; x2) = x1x2. Her income is m = $200. The prices for the two goods are p1 = $20 and p2 = $10 respectively. Find Annaís optimal consumption bundle. Show the complete calculations, and illustrate your answer graphically (draw the indi§erence curve and the budget constraint). How would your answer change to part (a) if Annaís utility function were given by v(x1;...

Sara has $40 in her budget. Given the following graph, what is the MRS of her...

Homework Answers