Ellie and Jenny both brought grapes and crackers in their school lunches.If they have different marginal rates of substitution of grapes for crackers, their parents have not allocated lunch resources efficiently.

Question

Quizplus · Accepted Answer

If Ellie and Jenny have different marginal rates of substitution, it indicates that they value grapes and crackers differently. Efficient allocation would require equalizing their marginal rates of substitution, allowing them to trade until they reach a point where both are maximizing their utility given their preferences.

Ellie and Jenny Both Brought Grapes and Crackers in Their