ques2 - person whose income is smaller may receive less...

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Kathy Tao Econ 101 Sect 24 Question of the Week #4 When everyone in the class makes purchases in the same Ithaca marketplace at the same prices, even if they optimize their consumption decisions, they may still not be experiencing the same incremental happiness per dollar spent. First, there is the issue of individual temperaments—some people are happier than others, and so the utility they derive from their purchases may generally be at higher levels than their unhappier classmates. Second, there are differences in income among the members of the class—a
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Unformatted text preview: person whose income is smaller may receive less marginal utility per dollar spent, while a person with a greater income may receive more marginal utility per dollar spent because they are able afford purchases that provide greater marginal utility. Third, there is the matter of individual time constraints—some people may have less time to enjoy their purchases, and thus derive less marginal utility per dollar spent. Those who have more time may derive more marginal utility per dollar spent....
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