How many dozen of each type of cookie will tony buy

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Reference no: EM13243938

Tony spends $36 per month on cookies. For him, chocolate chipcookies and peanut butter cookies are perfect substitutes.Chocolate chip cookies are $4 per dozen and peanut butter cookiesare $3 per dozen.

a) What is Tony's marginal rate of substitution ofchocolate chip cookies for peanut butter cookies? (Assume that chocolate chip cookiesis the good X which is on the horizontal axis)

b) What is the slope of his budget line?

c) How many dozen of eachtype of cookie will Tony buy in a given month if he wants tomaximize his utility?

Reference no: EM13243938

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