Dave has $50 to spend on lunch each week. He likes to eat a sandwich (x1) and coffee (x2) for lunch. Sandwich costs $5 e

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answerhappygod
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Dave has $50 to spend on lunch each week. He likes to eat a sandwich (x1) and coffee (x2) for lunch. Sandwich costs $5 e

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Dave has $50 to spend on lunch each week. He likes to eat asandwich (x1) and coffee (x2) for lunch.Sandwich costs $5 each and coffee costs $2.50 each. His preferenceis given by the utility function U (x1,x2) = x1x2.
(2+1+1+1) Draw Dave's budget line. What is the slope of thebudget line? What is Dave's Marginal Rate of substitution? Whatkind of preferences does Dave have?
(5) What is Dave's optimal choice of sandwich and coffeeeach week?
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