Ellie enjoys basketball (b) and soccer (s) according to the function U(b, s) = 3b + 4s. She has $120 to spend on lessons and each basketball or soccer lesson costs $30. a. What does Ellie's utility function say about her MRS of basketball for soccer? What do her indifference curves look like? b. How many basketball and soccer lessons should Ellie buy to maximize her utility? c. Would the number of basketball lessons Ellie buys change if she had more money to spend? Explain your answer.

Ellie enjoys basketball (b) and soccer (s) according to the function U(b, s) = 3b + 4s. She has $120 to spend on lessons and each basketball or soccer lesson costs $30. a. What does Ellie's utility function say about her MRS of basketball for soccer? What do her indifference curves look like? b. How many basketball and soccer lessons should Ellie buy to maximize her utility? c. Would the number of basketball lessons Ellie buys change if she had more money to spend? Explain your answer.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 6P

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