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The Müller family has an income of € 4,000 per month. The family gives their entire income for Food and clothing. A piece of clothing costs € 40 and a shopping basket for groceries costs € 20. a) Draw the optimal consumption point. b) How high is the slope of the budget line and how is it to be interpreted? c) How high is the marginal rate of substitution at the optimal consumption point and what is the marginal rate to interpret the substitution? c) Ms. Müller decides to go back to work. She also earns € 4000 a month. Show it,

The Müller family has an income of € 4,000 per month. The family gives their entire income for Food and clothing. A piece of clothing costs € 40 and a shopping basket for groceries costs € 20. a) Draw the optimal consumption point. b) How high is the slope of the budget line and how is it to be interpreted? c) How high is the marginal rate of substitution at the optimal consumption point and what is the marginal rate to interpret the substitution? c) Ms. Müller decides to go back to work. She also earns € 4000 a month. Show it,

Principles of Economics, 7th Edition (MindTap Course List)
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 3QCMC
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The Müller family has an income of € 4,000 per month. The family gives their entire income for Food and clothing. A piece of clothing costs € 40 and a shopping basket for groceries costs € 20. a) Draw the optimal consumption point. b) How high is the slope of the budget line and how is it to be interpreted? c) How high is the marginal rate of substitution at the optimal consumption point and what is the marginal rate to interpret the substitution? c) Ms. Müller decides to go back to work. She also earns € 4000 a month. Show it,
Transcribed Image Text:The Müller family has an income of € 4,000 per month. The family gives their entire income for Food and clothing. A piece of clothing costs € 40 and a shopping basket for groceries costs € 20. a) Draw the optimal consumption point. b) How high is the slope of the budget line and how is it to be interpreted? c) How high is the marginal rate of substitution at the optimal consumption point and what is the marginal rate to interpret the substitution? c) Ms. Müller decides to go back to work. She also earns € 4000 a month. Show it,
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