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stars_and_moon stars_and_moon
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7 years ago
Peggy goes to the bookstore to buy some t-shirts and some notebooks.  When she goes up to the counter, she has four t-shirts and four notebooks.  The price of t-shirts is $15 and the price of notebooks is $5.  The total utility of all four t-shirts is 200 and the marginal utility of the 4th t-shirt is 10.  The total utility of all four notebooks is 100 and the marginal utility of the 4th notebook is five.  If Peggy is maximizing utility, explain to her why the combination of t-shirts and notebooks she currently has is best.  If Peggy is not maximizing utility, give her advice as to why and how she should change her purchase to maximize utility.
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kingbykingby
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7 years ago
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#2
7 years ago
I figured, great answer
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#3
7 years ago
I instantly knew the answer when I read the question, happy to help
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