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1. Tyler likes hamburgers (H) and milkshakes (M). The price of a milkshake is $1 and the price of a hamburger is $3. Tyler is spending all of his at the market basket that he is currently consuming, where is MRSHF=2.
a. Write the equation of a line that represents the budget constraint. Clearly interpret the slope.
b. Is Tyler maximizing utility at this market basket? If not, explain the adjustment that he would make to achieve the objective of maximum utility. Frame your answer is the context of marginal benefit and cost and illustrate graphically using line segments.
c. Explain the initial position within the context of marginal utility per last dollar spent on each good. Show graphically.
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