Dusty derives utility from 3 goods music m wine w and, Ask an Expert

Economics

Dusty derives utility from 3 goods: music (M), wine (W), and cheese (C). His utility function is given by: u(M,W,C) = M + 2W + C.

a. Assuming Dusty’s consumption of music is fixed at 10, sketch the indifference curves between W and C for u = 40, and then again for u = 70.

b. Show that Dusty’s MRS of wine for cheese is constant for all values of W and C on the indifference curves calculated in part (a).

c. Suppose that Dusty’s consumption of music increases to 20. How would this change your answer to parts (a) and (b)?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91710694

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