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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
Posted: Sun Jul 03, 2022 6:55 am
by answerhappygod
- Dave Has 50 To Spend On Lunch Each Week He Likes To Eat A Sandwich X And Coffee X For Lunch Sandwich Costs 5 E 1 (57.4 KiB) Viewed 12 times
Dave has $50 to spend on lunch each week. He likes to eat a sandwich (x₁) and coffee (x₂) for lunch. Sandwich costs $5 each and coffee costs $2.50 each. His preference is given by the utility function U (X1, X2) = x1x2. (2+1+1+1) Draw Dave's budget line. What is the slope of the budget line? What is Dave's Marginal Rate of substitution? What kind of preferences does Dave have? (5) What is Dave's optimal choice of sandwich and coffee each week?