Suppose a consumer has 150 to spend on food and clothing

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Suppose a consumer has $150 to spend on food and clothing. Food costs $4 per unit and clothing costs $5 per unit. The consumer's utility function is U(c,f) = f^2c.

a. Give an equation for the consumer's budget line.

b. Give a formula for the consumer's marginal rate of substitution in consumption

(MRSC) of clothing for food. [Hint: This is the slope of the consumer's indifference curve when food is on the vertical axis and clothing is on the horizontal axis.]

c. Compute the quantities of food and clothing that maximizes the consumer's utility.

Reference no: EM13379229

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