1. (10 marks) Jack and Jill are dining at a fish and chips joint. The joint sell
ID: 1155849 • Letter: 1
Question
1. (10 marks) Jack and Jill are dining at a fish and chips joint. The joint sells fish at a fixed price (regardless of how much fish or chips a consumer is purchasing), and chips at another fixed price. Assume that both fish and chips are perfectly divisible, and that both Jack and Jill have strictly monotone, strictly convex preferences. An economic student working at the joint finds out that Jack has a marginal rate of substitution of -3 between fish and chips at his purchased bundle. The student also realises that Jack and Jill have different preferences. In addition, the student knows that both Jack and Jill have purchased positive amounts of both goods True or False (and explain): Jill's marginal rate of substitution between fish and chips at her purchased bundle must also be -3.Explanation / Answer
Answer:
Jill’s marginal rate of substitution between fish and chips at her purchased bundle must also be -3
Because jill and jack both have different preferences so their marginal rate of substitution will be different
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