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Sara consumes shoes (D) and Crocs (C). Her marginal utility from consuming casual Crocs is MUC=20DC and her marginal utility from consuming dress shoes is
Sara consumes shoes (D) and Crocs (C). Her marginal utility from consuming casual Crocs is
MUC=20DC
and her marginal utility from consuming dress shoes is
MUD=10C2.
Her annual shoe allowance is
$360,
which she spends on only dress shoes and Crocs. If she pays
$40
for a pair of dress shoes and
$40
for a pair of Crocs, what is her optimal consumption bundle?
Sara's satisfaction-maximizing bundle contains how many
pairs of Crocs and
how many
pairs of dress shoes.
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