Julio receives utility from consuming food (F) and clothing (C) as given by the utility function . In addition, the price of

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Julio receives utility from consuming food (F) and clothing (C) as given by the utility function . In addition, the price of

food is $3 per unit, the price of clothing is $8
per unit, and Julio's weekly income is $50.
Part 2
What is Julio's marginal rate of substitution of food for clothing when utility is maximized? Explain.
Part 3
Julio's marginal rate of substitution equals

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1 answer:

AleksandrR [38] · Answer 1 · 2023-11-30T14:23:16+03:00

Julio's marginal rate of substitution equals is: 0.38, which is the price of food divided by the price of clothing.

<h3>Marginal rate of substitution</h3>

Using this formula

Marginal rate of substitution=Price of food/Price of clothing

Let plug in the formula

Marginal rate of substitution=$3 per unit/$8 per unit

Marginal rate of substitution=0.375

Marginal rate of substitution=0.38 (Approximately)

Therefore Julio's marginal rate of substitution equals is: 0.38, which is the price of food divided by the price of clothing.

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Julio receives utility from consuming food​ (F) and clothing​ (C) as given by the utility function . In​ addition, the price of

Julio receives utility from consuming food (F) and clothing (C) as given by the utility function . In addition, the price of