Use the information below to answer the following question. Marc has an income o

Question

Use the information below to answer the following question. Marc has an income of $20 and spends it on two goods, root beer (measured on the vertical axis) and chips (measured on the horizontal axis). The price of root peer is $1 a can. The price of chips is $0.50 a bag. Initially, Mare chooses to consume 10 cans of root beer and 20 bags of chips. Then the price of root beer rises to $1.50 per can and the price of chips falls to $0.25 a bag. Refer to Fact 9.3.1. Marc's initial marginal rate of substitution was equal to 2 cans of root beer given up for each bag of chips gained. equal to 10 cans of root beer given up for each bag of chips gained. not calculable with the information give. Equal to 1 can of root beer giver up for each bag of chips gained. equal to 1/2 can of root beer given up for each bag of chips gained.

Explanation / Answer

Answer is E

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

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