Fred loves tomatoes. He makes soups, sauces, and stews with them; stuffs them; r

Question

Fred loves tomatoes. He makes soups, sauces, and stews with them; stuffs them; roasts them; and grills them. Fred has discovered a farmer’s market where the price of a bushel of tomatoes depends on how many bushels are purchased. The first bushel is $15; the second, $12; the third, $10; and four or more, $9 each. Fred has $82 to spend on tomatoes and on “all other things” during the coming week. All other things sell for $1 per unit. Assume that all other things are measured on the vertical axis. What is Fred’s marginal rate of substitution if he chooses to buy 5 bushels of tomatoes?

note:please show me the answer and full process details thank you

Explanation / Answer

Price of purchasing 5 bushel each is 9$

Price of all other things is 1$ each

Since, we know Marginal Rate of Substitution = - Price ratio of two goods

MRS = - 9$/1$ = - 9

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.