Answer
The optimal quantity of wine and optimal quantity of cheese is where the budget constraint intersects with the indifference curve.
Work Step by Step
The marginal rate of substitution is 2 (two glasses of wine for a pound of cheese).
Principles of Economics, 7th Edition
by Mankiw, N. Gregory
Published by
South-Western College
ISBN 10:
128516587X
ISBN 13:
978-1-28516-587-5
Chapter 21 - Part VII - The Theory of Consumer Choice - Questions for Review - Page 458: 4
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