# HW8. (8 points) Peter also likes coffee (x) with sugar (y), but his utility function is...

###### Question:

HW8. (8 points) Peter also likes coffee (x) with sugar (y), but his utility function is U(x, y) = 5x + 4y. Peter has purchased 4 ounces of coffee and 5 grams of sugar.
(i) Compute the marginal utilities of coffee and of sugar, as well as the marginal rate of substitution of coffee for sugar at this point.

(ii) Please draft a detailed sketch of Peter’s indifference curve that contains his purchase.

11. (12 points) Recall Peter of problem 8 of homework 1.1. His utility function is u(x, y) = 5x + 2y where x is the number of ounces of coffee and y is the quantity of sugar in grams. Let unit prices be given by Px = 6 cents, Py = 2 cents, and assume that Peter has $9 to spend on coffee and sugar. Find Peter’s best choice, in terms of quantities of coffee and sugar. Illustrate it graphically. (only solve 11 ) ## Answers #### Similar Solved Questions 1 answer ##### Only choose one, which of these investments would you choose? 4. You are given the following... only choose one, which of these investments would you choose? 4. You are given the following information. Weight (proportion of portfolio) Risk (standaro deviation of return) 3% 9% Return Hotel Hotel X Y 10% 20% 75% 25% Hotel a. Calculate the expected return of the portfolio. b. Calculate the standa... 1 answer ##### Read the following abstract: Previous research has shown that ostracism even by outgroup members is aversive.... Read the following abstract: Previous research has shown that ostracism even by outgroup members is aversive. In this study we examined whether ostracism by a particular type of outgroup, a despised outgroup, was sufficient to inflict emotional distress. We manipulated ostracism using Cyberball, an ... 1 answer ##### Marcia observed the following cash flow series (in$1000 units) in an accounting report at work....
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