Q121314 step-by-step

Problem 4: Perfect Substitutes [5 Points] Consider an Individual who buys films (F) and books (B) with the following utility function: U(F,B) = SB + 2F This individual also has the following incomes (m) and prices (pp and pg): 711 = $50, pF = $5,193 = $10 Given the above: 12. Draw the utility functions for utility levels of 10 and 20. Draw these with films on the x- axis and books on the y-axis. Show your work. [1 points] 13. What is the MRS for these utility functions? Assume that films remain on the x-axis and books remain on the y-axis. Show your work. [2 points] 14. What is the consumption bundle that delivers the highest level of utility that is also affordable? Show your work. [2 points]