An optimizing consumer currently spends money on many goods. The last pair of sunglasses she bought...
An optimizing consumer currently spends money on many goods. The last pair of sunglasses she bought cost $30 and gave her 10 utils of satisfaction. If this same consumer spends $10 on a hat and is still optimizing utility, how many utils will she receive from the purchase?
Homework Answers
The MU/P for the goods should be the same in order to maximize utility.
MU/P (sunglasses) = 10/30
Price of hat = $ 10
Utils received from a hat = 10/30 x 10 = 10/3 = 3.33 utils
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