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  3. 4. a. mr. wright is a clothing salesman. he is pai

4. a. Mr. Wright is a clothing salesman. He is paid $500, but his employer...

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Accounting

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4. a. Mr. Wright is a clothing salesman. He is paid $500, but his employer requires him to spend at least $100 of his income on clothing. Show that his utility level is lower than it would be if he could freely allocate his income between clothing and all other goods. Assume that Mr. Wright would choose to spend less than $100 on clothing if his employer did not impose the requirement. b. What must be true about Mr. Wright's marginal rate of substitution between clothing and other goods at his restricted consumption bundle. c. What implications does this problem have for determining whether or not cash or in-kind (e.g., food stamps, public housing, free medical care) transfers are preferable as a means to improve the well-being of lower income persons

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