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Pauline loves reading. She has a positive marginal utility for books and other goods. Her income is 300. The price of a book is 20.
Pauline loves reading. She has a positive marginal utility for books and other goods. Her income is 300. The price of a book is 20. At this price she consumes 10 books and spends 100 on the other goods. Pauline is considering becoming a member of a book club, which offers discounts on books. There is a membership fee of 100 but then each book is only 10. Use consumer theory to find out how becoming a member of the club will change Paulines consumption pattern and determine whether or not she should join the club.
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