Question

Suppose that an individual has a constant MRS of shoes for sneakers of 4:3 (that is, he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes). Then, if sneakers and shoes are equally costly, he or she w1l1:

a. buy only sneakers.
b. buy only shoes
c.spend his or her income equally on sneakers and shoes..
d.wear sneakers only 3/4 of the time

Answer 1

Answer:A .buy only sneakers

Explanation: The MRS for sneakers is  3  and Shoes is 4, meaning sneakers is of higher MRS than shoes. Also meaning that, sneakers are originally expensive or costly than shoes. If the price of both item have risen, it simply stand to reason that his attachments for sneakers will equally be higher as against the shoes. Meaning, he will demand  for sneakers will increase and he might eventually stick to buying only sneakers.