What is the equation for linda budget line

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Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes dancing per month, T, is U(S,T) = 2 ST. What is her marginal utility from shoes and what is her marginal utility from dancing? It costs Linda $50 to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $500 to spend on clothing and dancing.

1. What is the equation for Linda's budget line? Draw it (with T on the vertical axis), and label the slopes and intercepts.

2. What is her marginal rate of substitution? Explain.

3. Solve mathematically for her optimal bundle. Show in a diagram how to determine this bundle using indifference curves and a budget line.

Reference no: EM133224102

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