Business, 24.02.2020 19:56 madisonvinson0

Julio receives utility from consuming food (F) and clothing (C) as given by the utility function Upper U (Upper F comma Upper C )equals FC. In addition, the price of food is $3 per unit, the price of clothing is $6 per unit, and Julio's weekly income is $50. What is Julio's marginal rate of substitution of food for clothing when utility is maximized? Explain. Julio's marginal rate of substitution equals A. 2.00, which is Julio's level of satisfaction. B. 0.50, which is the price of clothing divided by the price of food. C. 2.00, which is the price of clothing divided by the price of food. D. 2.00, which is (minus) the slope of the budget line. E. 0.50, which is the price of food divided by the price of clothing. Suppose instead that Julio is consuming a bundle with more food and less clothing than his utility maximizing bundle. Would this marginal rate of substitution of food for clothing be greater than or less than your answer above? Explain. If Julio is instead consuming a bundle with more food and less clothing than

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Julio receives utility from consuming food (F) and clothing (C) as given by the utility function Upp...