Chapter 20: Q. 9 (page 464)
Given your answers to Problems and, are Sue's preferences for soft drinks consistent with the law of demand?
Short Answer
Total utility begins to decrease at this time, going from to units.
Chapter 20: Q. 9 (page 464)
Given your answers to Problems and, are Sue's preferences for soft drinks consistent with the law of demand?
Total utility begins to decrease at this time, going from to units.
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Discuss why bounded rationality may prevent reaching a true consumer optimum.
At a consumer optimum, for all goods purchased, marginal utility per dollar spent is equalized. A high school student is deciding between attending Western State University and Eastern State University. The student cannot attend both universities simultancously. Both are fine universities, but the reputation of Western is slightly higher, as is the tuition. Use the rule of consumer optimum to explain how the student will go about deciding which university to attend.
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