# The utility that Julie receives by consuming food F and clothing C ...

## Question

The utility that Julie receives by consuming food F and clothing C is given by U(F,C) = FC. For this utility function, the marginal utilities are MUF = C and MUC = F.

1) On a graph with F on the horizontal axis and C on the vertical axis, draw indifference curves for U = 12, U = 18, and U = 24.

2) Do the shapes of these indifference curves suggest that Julie has a diminishing marginal rate of substitution of food for clothing?
True/False

3) Do the shapes of these indifference curves suggest that Julie has a diminishing marginal rate of substitution of food for clothing? Explain.

4) Using the marginal utilities, show that the MRSF,C = C/F . What is the slope of the indifference curve U = 12 at the basket with 2 units of food and 6 units of clothing?
a. -6
b. -3
c. -2
d. -1
e. None of the above.

5) What is the slope of the indifference curve U = 12 at the basket with 4 units of food and 3 units of clothing?
a. -3
b. -4
c. -0.75
d. -1.33
e. None of the above.

6 Do the slopes of the indifference curves indicate that Julie has a diminishing marginal rate of substitution of food for clothing?
True/False

## Solution Preview

These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

By purchasing this solution you'll be able to access the following files:
Solution.pdf.

# 50% discount

Hours
Minutes
Seconds
\$5.00 \$2.50
for this solution

or FREE if you
register a new account!

PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

### Find A Tutor

View available Economics Tutors

Get College Homework Help.

Are you sure you don't want to upload any files?

Fast tutor response requires as much info as possible.