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14 November, 19:09

Suppose the price of jeans is $100 and the price of boots is $100. if charles buys 3 pairs of jeans and 2 pairs of boots each year, charles is not spending all of this budget. charles must receive the same marginal utility from the 3rd pair jeans as he does from the 2nd pair of boots. charles cannot be maximizing utility. jeans must provide more marginal utility than boots. boots must provide more marginal utility than jeans.

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  1. 14 November, 19:13
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    Being that Charles is buying more pairs of jeans than boots at the same price, we can infer that jeans have more marginal utility than boots. People will continue to purchase items (provided budget constraints) until their marginal utility is equal to margin cost.
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