Tuesday, August 9, 2011

Marginal Rate of Substitution Question?

alright so if the marginal rate of substitution is 5/2 . what would be the worth of each good? the question asks 1 snickers is worth________ twinkies or 1 twinkies is worth_______ snickers. i understand how to answer if the MRS is a whole number like 3. it would be 1 snicker is worth 3 twinkies or 1 twinkie is worth 1/3 of a snicker.

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