Question: 1) Serpil's utility function is U ( B, C) = B . C where B = veggie burgers per week and C = packs of

1) Serpil's utility function is U ( B, C) = B . C where B = veggie burgers per week and C= packs of cigarettes per week.

a) What is her marginal rate of substitution if veggie burgers are on the vertical axis and cigarettes are on the horizontal axis?

b) Serpil's income is $120, the price of veggie burger is $2, and that of a pack of cigarettes is $1. How many burgers and how many packs of cigarette does Serpil consume to maximize her utility? Illustrate your answers in a graph.

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