Suppose a consumer has three jobs and keeps the income from his jobs in separate mental accounts. The income from job $i, y_{i}$, is used to purchase $x_{i}$. By keeping separate mental accounts, the consumer is never able to achieve the optimal consumption bundle that he would achieve if he kept all three in the same account.

Question

Quizplus · Accepted Answer

By keeping separate mental accounts, the consumer restricts their ability to allocate resources efficiently across all goods, potentially leading to suboptimal consumption choices compared to pooling all income and optimizing across all goods.

Suppose a Consumer Has Three Jobs and Keeps the Income i,yii, y_{i}i,yi​

Suppose a Consumer Has Three Jobs and Keeps the Income $i, y_{i}$