Suppose Ben has a monthly income of $8,000 which he allocates between two goods rock cake and sodas. The price of a soda is $100 and the price of a rock cake is $150 


I. Graph Ben’s budget line with soda on the horizontal axis .

II. What is the slope of the budget line?

III. If the marginal utility for the last unit of soda is 500 units and that of rock cake is 400 units. What should Ben do to maximize his utility

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