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Bridget has a limited income and consumers only wine and cheese; her current consumption choice is four bottles of wine and 10 pounds of cheese. The price of wine is $10 per bottle, and the price of cheese is $4 per pound. The last bottle of wine added 50 units to Bridget’s utility, while the last pound of cheese added 40 units.
a. Is Bridget making the utility-maximizing choice? Why or why not?
b. If not, what should she do instead? Why?
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Suppose that the U.S. noninstituional adult population is 230 million and the labor force participation rate is 67 percent. Illustrate what would be the size of the U.S. labor force.
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