Eco_1_problem_set_6

Eco_1_problem_set_6 - bow inwards towards the origin and do...

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Eco 1 Spring 2008 Problem Set 6 Review chapter 9, including the appendix , before trying these. 1) Textbook (Review) questions 9-2.3 and 9-2.4: 2) Textbook (Problem) questions 9A.4 and 9A.5:
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Eco 1 Spring 2008 Problem Set 6 3) Textbook (Problem) question 9-4.7: 4) This one is deliberately cumbersome, and will take some time to read . Jane likes hamburgers ( H ) and milkshakes ( M ). Her indifference curves are convex (they
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Unformatted text preview: bow inwards towards the origin and do not intersect the axes). The price of a milkshake is $1 and the price of a hamburger is $3. She is spending all her income, and her Marginal Rate of Substitution is 2. (i) is Jane consuming optimally? (ii) if so , show why,. If not , should Jane buy more hamburgers and fewers milkshakes, or vice versa?...
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This note was uploaded on 03/20/2008 for the course ECO 1 taught by Professor Gunter during the Spring '04 term at Lehigh University .

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Eco_1_problem_set_6 - bow inwards towards the origin and do...

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