Consider the following utility function: U(x, y) = 10x + 2y. A consumer faces prices of px = 1 and py = 2. Assuming that graphically good x is on the horizontal axis and good y is on the vertical axis, suppose the consumer chooses to consume 5 units of good x and 13 units of good y. What is the marginal rate of substitution (MRS) equal to?
MRS = MUx/MUy
U = 10X + 2Y
MUx = 10
MUy = 2
MRS = 10/2
= 5
Consider the following utility function: U(x, y) = 10x + 2y. A consumer faces prices of...