Ejercicio Exercise 1 · Microeconomía II UPF 2015

Exercise 1 (5 points). Jane's MRS for swimming and running

Jane derives utility from two activities: swimming and running. She feels completely indifferent between swimming 2 km and running 20 km (bundle A), and swimming 5 km and running 10 km (bundle B). At bundle A, Jane is ready to give up at most 5 km of running to swim an extra 1 km. At bundle B, she is willing to give up at most 1 km of running to swim an additional 1 km. What conclusion can be drawn regarding Jane's Marginal Rate of Substitution ($|\mathrm{MRS}|$)?