Joe purchases 3 sandwiches and 5 slices of pizza per month. At this, consumption bundle, Joe's marginal rate of substituting pizza for sandwich is 2/5. The price of sandwich is $6 and price of pizza is $4.

(1) Show the current consumption bundle in a graph that includes both the budget line and indifference curve. Clearly label the axis.

(2) Explain whether or not Joe is maximizing his satisfaction at this consumption bundle. If not, make a suggestion as to how he can improve his satisfaction.

Answer rating: 100% (QA)

Answer 1 Here is current consumption bundle graph 2 Analyzing Joes Satisfaction Given Joes marginal ... View the full answer