Ok first timer Lisa.
We, the homework help providers, generally like to see some effort on the part of the student. We are not here to do your homework, but to guide your thinking.
But since you asked.
Optimal consumption will occur when MUx/MUy = Px/Py (where x and y are alternative goods.)
In b) let x be pens, let y be pencils. You have MUx=5, MUy=1, so MUx/MUy=5. You have Px=0.50, Py=0.10, so Px/Py = .5/.1 = 5. Finally, Lak is spending her entire budget. So, Lak's consumption is optimal.
c) let x=football, y=soccer. MUx/MUy = 2. Px/Py = 2. So far, Lak is consuming optimally. However, she is only spending $40; she still has $10 remaining. Further, there is not enough information to determine where (if anyplace) she should spend her last $10.
I hope this helps.
For each of the following situations, decide whether the bundle Lakshani is thinking about consuming is optimal or not. If it is not optimal, how could Lakshani improve her over-all level of utility? That is, determine which good she should spend more on and which good should she spend less on.
b. Lakshani has $5 to spend on pens and pencils. Each pen costs $0.50 and each pencil costs $0.10. She is thinking about buying 6 pens and 20 pencils. The last pen would add five times as much to her total utility as the last pencil
c. Lakshani has $50 per season to spend on tickets to foot-ball games and tickets to soccer games. Each football tick-et costs $10 and each soccer ticket costs $5. She is thinking about buying 3 football tickets and 2 soccer tickets. Her marginal utility from the third football ticket is twice as much as her marginal utility from the second soccer ticket
sorry first timer
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