[Solved] (Calculus version below.) Ely’s preferences for bread and soup can be represented by the utility function U ( S , B ) = S (1 + B ). For this

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(Calculus version below.) Ely’s preferences for bread and soup can be represented by the utility function U ( S , B ) = S (1 + B ). For this utility function, MU S = 1 + B and MU B = S. Soup costs $1 per pint and bread costs P B per ounce. Ely has $10 to spend. What is the formula for Ely’s MRS SB Does it have the declining MRS property Solve for and graph Ely’s price-consumption curve and his demand curve for bread (varying P B ). For what values of P B is his best choice an interior solution For what prices is it a boundary choice


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