A consumer has $140 in monthly income to be spent on two goods Z and B. The price of good Z (Pz) is $6.00. The Marginal Rate

Question

3 years ago

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A consumer has $140 in monthly income to be spent on two goods Z and B. The price of good Z (Pz) is $6.00. The Marginal Rate

of Transformation (MRT) is equal to minus2. That is 2 units of good B can be traded for 1 unit of good Z. What is the price of good B? $ nothing (round your answer to the nearest penny). How many units of good B can be purchased if all income is used for that good? nothing units (round your answer to two decimal places).

Business

1 answer:

romanna [79] · Answer 1 · 2022-09-02T12:58:46+03:00

Answer:

3 and 46.67 units

Explanation:

The formula and the computations are shown below:

The price of good B is

= {The price of good Z (Pz)} ÷ {Marginal rate of transformation}

= {$6} ÷ {2}

= 3

Now the number of units to be purchased for all income used is

= (Monthly income spent on two goods) ÷ (price of good B)

= ($140) ÷ (3)

= 46.67 units

By applying the above formula we can find out the price of good B and the number of units purchased

A consumer has ​$140 in monthly income to be spent on two goods Z and B. The price of good Z ​(Pz​) is ​$6.00. The Marginal Rate

A consumer has $140 in monthly income to be spent on two goods Z and B. The price of good Z (Pz) is $6.00. The Marginal Rate