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Suppose Becky's marginal utility of one pair of shoes is 400 and for 2 pairs is 200. Her marginal utility from 1 handbag is 100
Suppose Becky's marginal utility of one pair of shoes is 400 and for 2 pairs is 200. Her marginal utility from 1 handbag is 100 and of 2 handbags is 50. The price of shoes is $200 and the price of hand bag is $50. Suppose Becky has $500 to spend. If Becky is rational and satisfies the law of dimishing marginal utility then she should buy_______ (pairs of shoes) and ______(handbag)
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