May 2021 1 57 Report
Optimal Choices - Economics?

Samspends her entire monthly income of $600 on champagne (C) and

perfume (F). The price of a bottle of champagne is $30 and the price of an ounce

of perfume is $10. If she consumes 12 bottles of champagne and 24 ounces of

perfume, her MRS is -1. Is her choice optimal?

What does it mean by optimal?

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