What is marginal rate of substitution between flour and rice

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Reference no: EM1372534

Q. Utility function: u = x1 x2 (x1: flour, x2: price)
consumer's income = $2400
cost of 1kg of flour = $20
cost of 1kg of rice = $ 30

1. What is marginal rate of substitution between flour and rice?

2. What is amount of rice and amount of flour he should be consumed to maximize his utility?

Reference no: EM1372534

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