Question

Ms. Caffeine enjoys coffee (c) and tea (t) according to the function. What does her utility function say about her MRS of coffee for tea? What do her indifference curves look like?

Answer 1

Ms. Caffeine's utility function determines her MRS of coffee for tea and her indifference curves represent different combinations of coffee and tea that provide the same level of satisfaction.

Step-by-step explanation:

Ms. Caffeine's utility function describes how much she enjoys coffee and tea. The Marginal Rate of Substitution (MRS) of coffee for tea in her utility function measures how willing she is to trade one cup of coffee for another cup of tea while keeping her enjoyment constant. The indifference curves represent combinations of coffee and tea that provide Ms. Caffeine with the same level of satisfaction or utility.