Managerial Economics and Business Strategy 10) A worker views leisure and income as “goods” and has

Managerial Economics and Business Strategy 10) A worker views leisure and income as “goods”
and has an opportunity to work at an hourly wage of $15 per hour

a Illustrate
the worker’s opportunity set in a given 24-hour period

b Suppose
the worker is always willing to give up $11 of income for each hour of leisure
Do her preferences exhibit a diminishing marginal rate of substitution? How
many hours per day will she choose to work?

11) It is common for supermarkets to carry both generic
(store-label) and brand name (producer-label) varieties of sugar and other
products Many consumers view these products as perfect substitutes, meaning
that consumers are always willing to substitute a constant proportion of the
store brand for the producer brand Consider a consumer who is always willing
to substitute four pounds of a generic store-brand sugar for two pounds of a
brand-name sugar

Do these preferences exhibit a diminishing marginal rate of
substitution between store- brand and producer-brand sugar?

Assume that this consumer has $24 of income to spend on
sugar, and the price of a store-brand sugar is $1 per pound and the price or
producer-brand sugar is $3 per pound How much of each type of sugar will be
purchased?

How would your answer change if the price of store-brand
sugar was $2 per pound and the price of producer-brand sugar was $3 per pound?