Elizabeth and Edward both purchase cigarettes and beer at their local shop. The two friends have different tastes for cigarettes and beer, different incomes and they end up purchasing very different quantities of the two goods. Nevertheless, they have the same marginal rate of substitution of beer for cigarettes. Briefly explain how this is possible.
Elizabeth and Edward both purchase cigarettes and beer at their local shop. The two friends have different tastes for cigarettes and beer, different incomes and they end up purchasing very different quantities of the two goods. Nevertheless, they have the same marginal rate of substitution of beer for cigarettes. Briefly explain how this is possible.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter20: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 3CQ: Recent research confirms that the demand for cigarettes is not only inelastic, but it also indicates...
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Elizabeth and Edward both purchase cigarettes and beer at their local shop. The two friends have different tastes for cigarettes and beer, different incomes and they end up purchasing very different quantities of the two goods. Nevertheless, they have the same marginal rate of substitution of beer for cigarettes. Briefly explain how this is possible.
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