I need some help in answering the questions about this case study:
U = A(D^1/3 * C^2/3)
Doughnuts are $5
Cookies are $20
Income is $200

a. Assume that A= 1 for Janet's utility function (above). Calculate the marginal utility of doughnuts; the marginal utility of cookies;
b. Calculate the marginal rate of substitution of cookies for doughnuts (MRSC, D) for Paul's utility function.
c. Now, assume doughnuts and cookies can be sold in whole or in half packs. Assume also that the price and income levels of the two commodities are as provided above. Prove that the utility maximizing bundle for Janet will be 14 packs of doughnuts and 6.5 packs of cookies

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Solutions:
a. Assume that A= 1 for Janet's utility function (above). Calculate the marginal utility of doughnuts; the marginal utility of cookies;
U = A(D^1/3 * C^2/3)

Marginal Utility of doughnuts=MUD=dU/dD=A*(1/3)*D^(1/3-1)*C^(2/3)
Put A=1
MUD=(1/3)*D^(-2/3)*C^(2/3)

Marginal Utility of ...

Solution Summary

This solution depicts the steps to estimate the optimal bundle of consumption in the given case with step-by-step calculations and all formulas shown.

... 2. Now calculate the level consumption of both goods ... to the level of utility that you calculated in part ... It also shows how to calculate the expenditure function ...

... substitution effect and income effect you calculated in parts ... that passes through the initial bundle and is ... Show the coordinates of the optimal bundles on each ...

... On this basis, calculate the implied arc price elasticity of demand. ... The optimal input bundle is reached when MR = MC Now that MC = 120, we need to find ...

... Recommend an optimal bundling strategy for ... have information on the cost, we cannot calculate how is ... the total revenue depends largely upon the bundle price and ...

... Recommend an optimal bundling strategy for ... have information on the cost, we cannot calculate how is ... the total revenue depends largely upon the bundle price and ...

... the total cost curve is maximized at the optimal level of Q ...Calculate the own price elasticity ... At the equilibrium consumption bundle, which of the following holds ...

... 2,500 households that we use to calculate the share ... the number of units purchased, we calculated the market ... framework in order to develop optimal product line ...

... They were bundled, approved as such, and sold off to ... The point is that when calculating aggregate figures that ... In other words, the optimal is very unlikely to ...