Question: Jin buys only Timbits (T) and Donuts (D) at Tim Hortons. He views Donuts and Timbits as perfect substitutes. For him, one donut would give

Jin buys only Timbits (T) and Donuts (D) at Tim Hortons. He views Donuts and Timbits as perfect substitutes. For him, one donut would give him the same satisfaction as eight timbits would.

1) What is his marginal rate of substitution of Donuts for Timbits (MRS DT)? Draw Jin's indifference curve.

2) What is his utility function that would represent his preferences?

3) If the price of a Timbit is PT = 0,25$ and the price of a Donut is PD = 3$. If Jin has 3$ to spend on Timbits and Donuts, how many of each product would he purchase?

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