question archive Suppose that the marginal utility of the last euro John spends on food is greater than the marginal utility of the last euro he spends on shelter
Suppose that the marginal utility of the last euro John spends on food is greater than the marginal utility of the last euro he spends on shelter
Subject:EconomicsPrice: Bought3
Suppose that the marginal utility of the last euro John spends on food is greater than the marginal utility of the last euro he spends on shelter. For example, suppose the prices of food and shelter are €1/kg and €2/sq. m, respectively, and that the corresponding marginal utilities are 6 and 4. Show that John cannot possibly be maximizing his utility.
