Jane lives in a dormitory that offers soft drinks and chips forsale in vending machines. Her utility function is U=3SC (where S isthe number of soft drinks per week and C the number of bags ofchips per week), so her marginal utility of S is 3C and hermarginal utility of C is 3S. Soft drinks are priced at $0.50 each,chips $0.25 per bag.
a) Write an expression for Jane'smarginal rate of substitution between soft drinks andchips. (4 points)
b) Use the expression generated inpoint (a) to determine Jane's optimal mix of soft drinks andchips. (8 points)
c) If Jane has $5.00 per week tospend on chips and soft drinks, how many of each should shepurchase per week? (8 points)
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