Jane lives in a dormitory that offers soft drinks and chips


Jane lives in a dormitory that offers soft drinks and chips for sale in vending machines. Her marginal utility for soft drinks (Good X) is equal to 3Yand her marginal utility of chips (Good Y) is equal to 3X. MUx = 3Y MUY = 3X Soft drinks are priced at $0.50 each, chips $0.25 per bag.

a) write an expression for jane's marginal rate of substitution between soft drinks and chips.

b) use the expression generated in (a) to determine Jane's optimal mix of soft drinks and chips.

c) If Jane has $5/week to spend on chips and soft drinks, how many of each should she purchase per week?

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Business Economics: Jane lives in a dormitory that offers soft drinks and chips
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