Suppose an individual’s MRS of steak for beer is 3: That is, at the current consumption choices he or she is willing to give up 3 beers to get an…
Suppose an individual’s MRS of steak for beer is 3:1. That is, at the current consumption choices he or she is willing to give up 3 beers to get an extra steak. Suppose also that the price of a steak is $12 and a beer is $3. Then in order to increase utility the individual should
a. buy more steak and less beer
b. buy more beer and less steak
c. continue with current consumption
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