Homework answers / question archive / Suppose that a consumer’s marginal rate of substitution at her current chosen bundle is MUx / MUy = 10 but she can exchange X and Y at Px / Py = 5

Suppose that a consumer’s marginal rate of substitution at her current chosen bundle is MUx / MUy = 10 but she can exchange X and Y at Px / Py = 5

Economics

Share With

Suppose that a consumer’s marginal rate of substitution at her current chosen bundle is MUx / MUy = 10 but she can exchange X and Y at Px / Py = 5. Should she keep her current bundle, or can she make herself better off by trading at these prices? Which good will she buy, and which will she sell