Question: Solve it plzzz Question 2-5 Imagine a world with two goods: books and music. A consumer has preferences described by the following Utility function: U=B2M

Solve it plzzz

Solve it plzzz Question 2-5 Imagine a world with two goods: books

Question 2-5 Imagine a world with two goods: books and music. A consumer has preferences described by the following Utility function: U=B2M (B=books, M=music) (for the graphical representation, B=x-axis; M=y-axis) The absolute value of the Marginal Rate of Substitution (MRS) is: (absolute value means that we report the MRS as a positive number, we omit the negative sign) MRS=2M/B Question a) Calculate the optimal bundle (E*) considering that the consumer has an Income (Y)=90 and the prices of the goods are: Re=5 and RM=3. (RB= price of books, RM=price of music). Enter your answer here Question b) Let's suppose we ask to the consumer to exchange the bundle E (12,10) with another bundle F (8,13) in which s/he gets less books and more music. Should s/he accept it? Enter your answer here Question c) Represent graphically the optimal bundle E*, bundle F and the budget constraint. (for the graphical representation, B=x-axis; M=y-axis) Enter your answer here

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