Brenda's utility function for regular-flavored toothpaste (R) and mint-flavored toothpaste (M) is given by U = 2R + 4M. Which of the following statements is TRUE? A) MRS_MR = 2M/R. B) Brenda's indifference curves are vertical. C) Brenda's indifference curves are horizontal. D) Brenda is willing to give up two tubes of regular-flavored toothpaste for one tube of mint-flavored toothpaste.

Question

Quizplus · Accepted Answer

Brenda's MRS (Marginal Rate of Substitution) for R and M is given by the ratio of the marginal utility of R to the marginal utility of M, which is equal to 2/4 or 0.5. Therefore, Brenda is willing to give up 0.5 tubes of R for one tube of M. So, option D is true.

Option A is incorrect because the given formula is not valid for calculating MRS.

Option B is incorrect because Brenda's indifference curves are not vertical. The slope of her indifference curve is given by the MRS, which is constant and equal to 0.5.

Option C is incorrect because Brenda's indifference curves are not horizontal. Her preference for M over R is reflected in the positive coefficient of M in her utility function.

Brenda's Utility Function for Regular-Flavored Toothpaste (R) and Mint-Flavored Toothpaste