the equal marginal principle and marginal utilities
Finals have just ended, and you have two options for how to celebrate. You can go to a local coffee shop, the Blue Fox, and drink frosty chocolate milkshakes, B, for a price of P_B, or instead you can go to a local box social and consume ice cream cones, I. Ice cream cones cost P_I each. You can participate in both activities but have limited income.
Find both marginal utilities and explain what the marginal utility of hot chocolate, B, means in terms a non-economist would understand.
Write the equal marginal principle and explain what it means in terms a non-economist would understand (explain it as more than just the slope of some silly curve that most people haven’t heard of).
Solve for the demand function for ice cream.