Mathematics, 08.08.2021 20:20 lottie2306
Sharon lives in San Francisco and loves to eat desserts. She spends her entire weekly allowance on jello and pie. A bowl of jello is priced at $1.25, and
a piece of apple pie is priced at $3.75. At her current consumption point, Sharon's marginal rate of substitution (MRS) of jello for pie is 2. This means
that Sharon is willing to trade two bowls of jello per week for one piece of pie per week.
Does Sharon's current bundle maximize her utility-in other words, make her as well off as possible? If not, how should she change it to maximize her
utility?
O Sharon could increase her utility by buying less jello and more pie per week.
O Sharon could increase her utility by buying more jello and less pie per week.
O Sharon's current bundle maximizes her utility, and she should keep it unchanged.
Answers: 2
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Sharon lives in San Francisco and loves to eat desserts. She spends her entire weekly allowance on j...
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