At WholeFoods in Davis, the prevailing price for SmartWater is $1.80/Liter, and for FIJI Water is $2.40/Liter, if these products are priced to be consistent with an average WholeFoods shopper’s preferences, what do these prices reveal about his preferences?
1) His marginal level of satisfaction of having one Liter of FIJI Water is _______ times of his marginal level of satisfaction of having one Liter of SmartWater;
2) How many units of 1 Liter bottle of SmartWater can be used to substitute 1 Liter of FIJI Water to maintain his level of satisfaction? (Fraction number is ok.)
Problem 2:
At Safeway, the prevailing price for SmartWater is $1.90/Liter, and for FIJI Water is $2.00/Liter, if these products are priced to be consistent with an average Safeway shopper’s preferences, what do these prices reveal about his preferences?
1) His marginal level of satisfaction of having one Liter of FIJI Water is _______ times of his marginal level of satisfaction of having one Liter of SmartWater;
2) How many units of 1 Liter bottle of SmartWater can be used to substitute 1 Liter of FIJI Water to maintain his level of satisfaction? (Fraction number is ok.)