Suppose an individual’s MRS(of cheese for wine) is strictly decreasing in cheese and at current consumption choices equals 1/3. Suppose also that the price of a piece of cheese is $2 and a glass of wine $7. Then in order to increase utility the individual should (a) buy more cheese and less wine. (b) buy more wine and less cheese. (c) continue with current consumption plans. (d) none of the above.
Suppose an individual’s MRS(of cheese for wine) is strictly decreasing
Suppose an individual’s MRS(of cheese for wine) is strictly decreasing in cheese and at current consumption choices equals 1/3. Suppose also that the price of a piece of cheese is $2 and a glass of wine $7. Then in order to increase utility the individual should (a) buy more cheese and less wine. (b) buy more wine and less cheese. (c) continue with current consumption plans. (d) none of the above.
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