Individuals Derive Utility from Picnics, P, and Kayak Trips, K

question 51

Multiple Choice

Individuals derive utility from picnics, p, and kayak trips, k. Assuming that an individual's utility is U(p,k) = k^0.5p^0.5 and income is $100, what is the marginal rate of substitution (MRS) between picnics and kayak trips?

• A)MRS = 1.
• B)MRS = -1.
• C)MRS = -
• D)There is no substitution because picnics and kayak trips are perfect complements.

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