Micro Economics(This is NOT an essay, just problems)
(YOU DO NOT HAVE TO WRITE A PAPER, I JUST NEED THESE PROBLEMS TO BE SOLVED)
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
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