What is formula for relationship and evaluate bundle given

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Reference no: EM13223670

U= 10-c2+6b-b2

where coffee is c

and bagels is b

MUc=10-2c and MUb=6-2b

bruce can have as much coffe and bagels as he wants, he is uncontrained. Bruce decides to consume 5 cups of coffee and 3 bagels. what are his marginal utilities, for the last cup of coffee and last bagel. does this make intuitive sense? why or why not? how much total utility does this bundle give him?

Assume the price of coffee is $2 and the price of a bagel is one dollar. bruce has 8 dollars to spend on bagels and coffe. Bruce decides to consume 2 bagels and 3 cups of coffee. Show that the last dollar spent on bagels each week gives bruce the same amount of utility as the last dollar spent on coffee.(what is the formula for this relationship and evaluate the bundle given) Does your answer imply that bruce has selected his optimal bundle? Why or why not?

Reference no: EM13223670

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