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A consumer spends all of her income​(Y) on two goods Z and B.The price of good B ​(PB​) is $6. The Marginal Rate of Transformation MRT is equal to −2. That is 2 units of good B can be traded for 1 unit of good Z.This consumer is able to buy 18 units of good Z and 0 units of good B with​ his/her income. What is this​ consumer's level of​ income?

The​ consumer's income is ​$ ( )​(round your answer to the nearest ​penny).

Respuesta :

Answer:

The consumer's income is $216.

Explanation:

A consumer consumes two goods Z and B.  

The price of good B is $6.  

The consumer is consuming 18 units of good Z and 0 units of good B.  

The marginal rate of transformation is the ratio of the price of two goods.  

The marginal rate of transformation is -2.  

MRT = [tex]\frac{Pz}{Pb}[/tex]

2 = [tex]\frac{Pz}{6}[/tex]

Pz = 12

The budget constraint will be  

= [tex]12\ \times\ 18\ +\ 6\ \times\ 0[/tex]\

= $216