Problem
Suppose Cheryl buys only pasta and rice. She can buy both goods in perfectly divisible amounts. That is, she can buy them in fractional amounts such as ½ a pound of pasta, 1/3 a pound of rice, etc. Suppose further that she has spent all her money and finds that Is she in equilibrium? If not, should she buy more pasta or more rice (suppose she can return either good and spend more money on the other)? What happens to her marginal utility for each good when she changes her consumption choice (do they increase or decrease)?