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April 5, 2021

I. How do you compare the profit maximizing price and output of this firm with that of a perfectl

I. How do you compare the profit maximizing price and output of this firm with that of a perfectly competitive firm?

A. Suppose Ben has a monthly income of $8,000 which he allocates between two goods rock cake and sodas. The price of a soda is $100 and the price of a rock cake is $150.

I. Graph Ben’s budget line with soda on the horizontal axis .

II. What is the slope of the budget line?

III. If the marginal utility for the last unit of soda is 500 utilities and that of rock cake is 400 utilities. What should Ben do to maximize his utility

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