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Jill, a very careful maximizer of utility, enjoys the activities of ice skating and going to the movies each month. Assume th
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Answer #1

Preferences are perfect Substitutes

Let i : ice skating

m : movies

U(i,m) = 30i + 30m

Pi = 10, Pm = 15

As perfect Substitute Preferences, so only corner solution exist,

Thus, as MRS = MUi/MUm = 1

As MRS > Pi/Pm = 10/15

MUi/Pi > MUm/Pm

Only i is Consumed,

so, choose ice skating next activity

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