Scenario 16.3:
Sam and Sally are the only consumers in an economy where tee shirts and candy are the only commodities that are consumed. The marginal utility schedule for each appears below.
Sam tee shirts MU(tee shirts) Candy MU(Candy)
1 10 1 6
2 9 2 5
3 8 3 4
4 7 4 5
5 6 5 4
Sally tee shirts MU(tee shirts) Candy MU(Candy)
1 24 1 12
2 19 2 9
3 18 3 8
4 14 4 7
5 10 5 3
There are 7 candies and 7 tee shirts total in the economy.
Consider the case when the goods are redistributed such that Sam has 4 tee shirts and 4 candies. Sally has 3 tee shirts and 3 candies.
-Refer to Scenario 16.3. What is Sally's marginal rate of substitution of tee shirts for candy at the current distribution?
A) 9/4
B) 2
C) 4/9
D) It is impossible to determine without the prices of each commodity.
Correct Answer:
Verified
Q30: Q31: Scenario 16.2: Q32: Scenario 16.2: Q33: If the initial distribution of labor and Q34: Suppose there is a water shortage, and Q36: Scenario 16.3: Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
Sam and Sally are the only
Sam and Sally are the only
Sam and Sally are the only