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# Answer to Question #51393 in Microeconomics for rob

Question #51393
Stella is an 8 year old that gets a monthly allowance of $10 from her parents. There are only two things that Stella likes to spend her allowance on: chocolate bars and packages of stickers. Assume that initially chocolate bars cost$1 each and packages of stickers cost $2 each. Imagine that Stella has spent her allowance and made the optimal choice of consuming 2 chocolate bars and 4 packages of stickers. Suppose that we are given the information that Stellaâ€™s marginal utility from consuming more chocolate at this point is equal to 5. What is her marginal utility from a marginal increase in stickers? If Stella reduced the number of chocolate bars she consumed, would her marginal utility from chocolate bars increase or decrease? How would her total utility change? 1 Expert's answer 2015-03-17T13:05:04-0400 Stella gets a monthly allowance of$10. Pch = $1, Pps =$2. If as a result of the price change, the substitution effect caused Stella to increase her chocolate consumption by 4 chocolate bars, the income effect will be zero, because the change in consumption was only according to the substitution effect. We can't say whether Stella considers chocolate bars to be a normal or an inferior good, because we don't know the direction of the price change (increase or decrease). If the price decreased, then it is a normal good.

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