1. Suppose that Cathy consumes two goods: beef (b) and cabbage (c). Her utility function is U = b^1/3 c^2/3 . The price of beef is $9/lb and the price of cabbage is $3/lb. Cathy has $72. (a) What is Cathy’s MRSb,c for any value of b and c? (b) What is Cathy’s budget constraint? (c) What is Cathy’s optimal consumption bundle?
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