Assume there are only two brands of shoes that you purchase: Nike and Adidas. The more shoes you purchase, the lower the marginal utility of that pair of shoes. You spend all of your income and your...


Assume there are only two brands of shoes that you purchase: Nike and<br>Adidas. The more shoes you purchase, the lower the marginal utility of that<br>pair of shoes. You spend all of your income and your marginal utility of a pair<br>of Nike's is 200 and your marginal utility of a pair of Adidas shoes is 120.<br>The price of a pair of Nike's is $100 and the price of a pair of Adidas shoes<br>is $80. Which of the statements is true based on the above information?<br>O a. In equilibrium, you must give up two pairs of Adidas shoes for 1<br>pair of Nike's.<br>O b. You are maximizing your utility with your current choice of shoes.<br>O c. You could increase your satisfaction by trading Nike for Adidas<br>shoes.<br>O d. You could increase your satisfaction by trading Adidas for Nike<br>shoes.<br>

Extracted text: Assume there are only two brands of shoes that you purchase: Nike and Adidas. The more shoes you purchase, the lower the marginal utility of that pair of shoes. You spend all of your income and your marginal utility of a pair of Nike's is 200 and your marginal utility of a pair of Adidas shoes is 120. The price of a pair of Nike's is $100 and the price of a pair of Adidas shoes is $80. Which of the statements is true based on the above information? O a. In equilibrium, you must give up two pairs of Adidas shoes for 1 pair of Nike's. O b. You are maximizing your utility with your current choice of shoes. O c. You could increase your satisfaction by trading Nike for Adidas shoes. O d. You could increase your satisfaction by trading Adidas for Nike shoes.

Jun 09, 2022
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