Sabine can t tell the difference between Coke and Pepsi-the two taste exactly the same to her. a. What is Sabine s marginal rate of substitution of Coke in place of Pepsi? b. Draw a few of Sabine s indifference curves for Coke and Pepsi. Place Coke on the horizontal axis and Pepsi on the vertical axis. c. Sabine has $6 to spend on cola this week. Coke costs $1.50 per six - pack and Pepsi costs $1.00. Draw Sabine s budget line for Coke and Pepsi on the same diagram. d. What is Sabine s optimal consumption bundle? Show this on your diagram. e. If the price of Coke and Pepsi is the same, what combination of Coke and Pepsi will Sabine buy?
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