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Arthur spends his income on pie and whipped cream. He views pie as a good but is neutral about cream, in that he doesn’t care if he consumes it or not. Sofia, on the other hand, will consume pie only with whipped cream. Show Arthur and Sofia’s preference maps. What are their views on the two goods. ii. (1) Using diagrams and appropriate assumptions, explain why two indifference curves cannot intersect. b. Calculate the MRS of the following utility functions. Are they diminishing? Explain.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91927681

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