Leila currently buys 6 trips using public transportation with a marginal utility of 2, and 4 trips using ride-share with a marginal utility of 8. Suppose that the price of a trip through public transport is 12 and the price of a trip through ride share is 56. Is Leila currently maximizing her utility? Explain why or why not. If not, what is the optimal action to improve her utility?

Leila currently buys 6 trips using public transportation with a marginal utility of 2, and 4 trips using ride-share with a marginal utility of 8. Suppose that the price of a trip through public transport is 12 and the price of a trip through ride share is 56. Is Leila currently maximizing her utility? Explain why or why not. If not, what is the optimal action to improve her utility?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 2SCQ: Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to...

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