Microeconomics help please (urgent)

I just want an idea on how to do this, so will only post one example:

For each of the following situations, decide whether the bundle Lakshani is thinking about consuming is optimal or not. If it is not optimal, how could Lakshani improve her overall level of utility? That is, determine which good she should spend more on and which good should she spend less on.


a. Lakshani has $200 to spend on sneakers and sweaters. Sneakers cost $50 per pair, and sweaters cost $20 each. She is thinking about buying 2 pairs of sneakers and 5 sweaters. She tells her friend that the additional utility she would get from the second pair of sneakers is the same as the additional utility she would get from the fifth sweater.

  1. 👍 0
  2. 👎 0
  3. 👁 88
asked by Heidi
  1. ok, say the marginal utility (MU) from the 2nd sneakers and 5th sweater is X. With the sneakers, she is $50 to get X, with the sweaters, she is spending $20 to get X. She MAY be better off if she spent more on sweaters and less on sneakers. (I say MAY because we don't know the MU of the 6th sweater and the purchase decision is lumpy (she cant buy 1 shoe or 1/2 of a sweater))

    That said, in general, to maximize utility, a person should equate these two ratios MUx/MUy = Px/Py.

    1. 👍 0
    2. 👎 0
  2. For each of the following situations, decide whether the bundle Lakshani is thinking about consuming is optimal or not. If it is not optimal, how could Lakshani improve her overall level of utility? That is, determine which good she should spend more on and which good should she spend less on (2-part answers)


    a. Lakshani has $200 to spend on sneakers and sweaters. Sneakers cost $50 per pair, and sweaters cost $20 each. She is thinking about buying 2 pairs of sneakers and 5 sweaters. She tells her friend that the additional utility she would get from the second pair of sneakers is the same as the additional utility she would get from the fifth sweater.







    b. Lakshani has $5 to spend on pens and pencils. Each pen costs $0.50 and each pencil costs $0.10. She is thinking about buying 6 pens and 20 pencils. The last pen would add five times as much to her total utility as the last pencil.








    c. Lakshani has $50 per season to spend on tickets to football games and tickets to soccer games. Each football ticket costs $10 and each soccer ticket costs $5. She is thinking about buying 3 football tickets and 2 soccer tickets. Her marginal utility from the third football ticket is twice as much as her marginal utility from the second soccer ticket.

    1. 👍 0
    2. 👎 0
  3. . Lakshani has $200 to spend on sneakers and sweaters. Sneakers cost $50 per pair, and sweaters cost $20 each. She is thinking about buying 2 pairs of sneakers and 5 sweaters. She tells her friend that the additional utility she would get from the second pair of sneakers is the same as the additional utility she would get from the fifth sweater.

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. To haseeb

    I have removed your post because you included your email address, which is not a very good idea on the Internet. In addition, we tutor on these message boards; we do not do anything via email. That's another safety thing. I don't

    asked by Writeacher on May 6, 2011
  2. chem

    no idea how to do this! Please help! Determine the freezing point of a water solution of fructose( C6H12O6) made by dissolving 59.0 g of fructose in 485g of water. Answer in celcius. Same method outlined for your other post. Post

    asked by Anonymous on May 29, 2007
  3. Monitors of Board

    Is there any way that the postings could be numbered? The post below this one by TONY obviously refers to a previous posting of his 8 steps below. I know the URL has a number behind each particular post, and each post can be

    asked by Reiny on March 20, 2007
  4. Calculus - Optimization

    UBC parcel post regulations states that packages must have length plus girth of no more than 84 inches. Find the dimension of the cylindrical package of greatest volume that is mailable by parcel post. What is the greatest volume?

    asked by Ass11 on November 24, 2011
  5. CRITICAL THINKING

    Please post a substantive response to the following discussion questions by clicking on Reply: Aristotle developed a theory of persuasion by which there are three ways a speaker can persuade an audience. Ethos is the idea that an

    asked by WILL on June 28, 2012
  6. Behavioral Stat. Help!

    Conducting a post hoc test is similar to conducting multiple t-tests. As a result, it would seem natural to want to bypass the ANOVA and just use repeated t-tests. Explain why this approach is not necessarily a good idea and why

    asked by slomomo on November 25, 2015
  7. Math

    A farmer builds a straight fence that's 49 ft. He puts a post every 7ft. How many post does he need. A post is at the beginning and end How can you show the relationships in the problem Solve and explain your reasoning 8 post. I

    asked by Anonymous on May 23, 2016
  8. To Sam: Penn Foster answers

    Please do not post any more answers. Jiskha is not a repository for any exam answers. In addition, we have no idea what the questions are. If you want to post a couple of your exam questions along with your answers, we'll be glad

    asked by Ms. Sue on October 3, 2011
  9. Algebra

    Factor m^2-k^2+6k-9 ^2 means squared. I don't know any other way to type it. Thanks. Seems to me you can only do this in 2 pieces...factor the first 2, then the last 2... (m+k)(m-k) + 3(2k+3) Whadya think? hmmm... I looked in the

    asked by Kyle on October 9, 2006
  10. about this site please read

    im trying to post something but it says I cant because youre not allowed to post internet addresses but I don't have any in my post please help. You likely have a www in the text. nope read it over and over .is that the only thing

    asked by Jon on April 24, 2007
  11. Math 117

    Explain how to divide a polynomial by a binomial using an example. (Please refer to the post “How to post equations” in the Main Forum to post your response with correct equations/expressions showing.) Make sure you post the

    asked by lovelife on July 8, 2010

More Similar Questions