Blutarsky is throwing a party at his Fraternity and is trying to ...

[Sufayan.ah]

Blutarsky is throwing a party at his Fraternity and is trying to choose what booze to buy. A bottle of vodka has four times the alcohol as a six-pack of beer.
 
  If Blutarsky only cares about the total amount of alcohol in his basket, what is his marginal rate of substitution of bottles of vodka for six-packs of beer? Devise a utility function to represent these preferences.

Question 2

Which of the following is most likely the most beneficial form of monopoly advantage?
 
  A) better production methods
  B) input hoarding
  C) decreasing returns to scale
  D) government protection

[Jmfn03]

Answer to Question 1

Blutarsky is willing to trade 1 bottle of vodka for 4 six packs of beer making his MRS = 4. A utility function for these preferences is U(V,B) = aV + bB, where a > 0, b > 0 and a/b = 4.

Answer to Question 2

A

[Sufayan.ah]

Excellent

[mcabuhat]

TYSM