Ariel consumes two goods, shoes (s) and watches (w). Consider her budget constraint: $50s + $120w =

Question:

Ariel consumes two goods, shoes (s) and watches (w).

Consider her budget constraint:

$50s + $120w = $2000

a. What are the prices of shoes and watches, and what is Ariel’s income?

b. Explain whether Ariel can consume 8 pairs of shoes and 15 watches. If so, is her satisfaction maximized?

c. Explain whether Ariel can consume 15 pairs of shoes and 8 watches. If so, is her satisfaction maximized?

d. If Ariel has already consumed 10 watches and wants to spend the rest of her income on shoes, how many pairs of shoes can she buy?

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Economics

ISBN: 287201

6th Global Edition

Authors: Daron Acemoglu, David Laibson, John A. List

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Question Posted: Nov 18, 2024 01:00 AM

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Ariel consumes two goods, shoes (s) and watches (w). Consider her budget constraint: $50s + $120w =

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Economics

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