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Why can Ms. Bain not consume at point Y in Figure 7.10?

Daniel Kevins

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  1. Why can Ms. Bain not consume at point Y in Figure 7.10?
  2. Suppose Ms. Bain is now consuming at point V in Figure 7.10. Use the marginal decision rule to explain why a shift to X would increase her utility.
  3. Suppose that you are a utility maximizer and so is your economics instructor. What can you con- clude about your respective marginal rates of substitution for movies and concerts?
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Daniel Kevins

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