Answer to Question #71637 in Microeconomics for ernest

Question #71637
A consumer spends all her income on food and clothing. At the current prices of Pf = K10 and Pc = K5, she maximizes utility by purchasing 20 units of food and 50 units of clothing What is the consumer’s income? What is the consumer’s marginal rate of substitution of food for clothing at the equilibrium position?
1
Expert's answer
2017-12-07T10:08:07-0500
Income is 10*20+5*50=K450
Consumer’s marginal rate of substitution of food for clothing at the equilibrium position is
10/5=2

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