Thursday, August 18, 2011

Help with Microeconomics?

With the per-unit price of Chicken (C) and Apples (A) equal to $2 and $1, a consumer, Mike, with an income of $1,000 purchases 300C and 400A. At that point, the consumer's Marginal Rate of Substitution (MRS) of Chicken = 3 A/ 1 C. Does this mean that Mike is at his optimal point? If not, state the reason and suggest a solution.

No comments:

Post a Comment