What is the value of his utility at this bundle

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Nick is indifferent between 3 hours of basketball (Y) and 1 hour of swimming (X). His preferences are represented by the following utility function: U(X,Y) = 3X + Y. He has a budget of $100. Swimming costs $10 per hour, and playing basketball costs $20 per hour. a. Graph Nick’s budget line. What is the relative price of swimming in terms of basketball? b. What is Nick’s MRS of swimming in terms of basketball? Do his indifference curves exhibit diminishing MRS or constant MRS? c. What is the relationship between the relative price of swimming in terms of basketball and the MRS of swimming for basketball? (Hint: less than, greater then, or equal.) d. Identify Nick’s utility-maximizing consumption bundle on your graph, including his indifference curve that is associated with his optimal bundle. e. What is the value of his utility at this bundle?

Reference no: EM13149708

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