Question

B. if lucinda has only $18 to spend and the price of kewpie dolls and the price of beanie babies are both $6, how many of each would lucinda buy if she were rational? 0 kewpie dolls and 3 beanie babies 3 kewpie dolls and 0 beanie babies 2 kewpie dolls and 1 beanie baby 1 kewpie doll and 2 beanie babies

Answer 1

If Lucinda has $18 to spend and both kewpie dolls and beanie babies cost $6 each, she would buy 3 beanie babies and 0 kewpie dolls.

Step-by-step explanation:

Lucinda has $18 to spend and the price of both kewpie dolls and beanie babies is $6 each. In order to determine how many of each she would buy, we need to divide her total budget by the price of one doll or one beanie baby. If she spends all her money on kewpie dolls, she can buy $18 / $6 = 3 dolls. If she spends all her money on beanie babies, she can buy $18 / $6 = <<3=3>>3 beanie babies. Since the question asks for a rational decision, Lucinda would choose to buy 3 beanie babies and 0 kewpie dolls.

Answer 2

Given the table below comparing the marginal benefit Lucinda gets from Kewpie dolls and Beanie Babies.


`\begin{tabular} {|p {2cm}|p {2cm}|p {2cm}|p {2cm}|} \multicolumn {4} {Lucinda's Kewpie Doll and Beanie Baby Marginal Benefits}\\[1ex] \multicolumn {2} c {Kewpie Dolls}&\multicolumn {2} {Beanie Babies}\\[1ex] 1&\$15.00&1&\$12.00\\ 2&\$12.00&2&\$10.00\\ 3&\$9.00&3&\$8.00\\ 4&\$6.00&4&\$6.00\\ 5&\$3.00&5&\$4.00\\ 6&\$0.00&6&\$2.00\\ \end{tabular}`

If lucinda has only $18 to spend and the price of kewpie dolls and the price of beanie babies are both $6,

Lucinda will buy the combination for which marginal benefit is the same.

Therefore, Lucinda will buy 2 kewpie dolls and 1 beanie baby, if she were rational.