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Question: question 3 after winning the lottery australian artie decides to...

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Question 3: After winning the lottery, Australian Artie decides to retire, stay home, and watch sports on television all day. Artie likes both Rugby, R, and Aussie Rules Football, F and views them as imperfect substitutes. In particular, Arties preferences can be represented by the follow- ing utility function: u = R04Fs. Since Artie is rich, the only cost of watching F is the opportunity cost of not watching R: one hour of R necessarily means one hour less of F. In other words, even though Artie is rich, there is still a price on his time. (a) What is Arties marginal rate of substitution between R and F, MRSRF? Interpret it. (b) What is the price ratio, pa/pr? Interpret it. (c) Suppose Artie chooses some bundle, (R, F). If this bundle maximizes Arties utility, what relationship must hold between R and F? MU& be equal to? should find actual numbers.] (d) DefineMus, What is the interpretation of this? If Artie is maximizing his utility, what must PR e) Suppose there are 24 hours in a day. What bundle (R, F) wl Artie consume? [Now you

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