In a week, Erin buys 1 six-pack of soda and sees 2 movies when a movie ticket
Question:
In a week, Erin buys 1 six-pack of soda and sees 2 movies when a movie ticket is $10, soda is $5 a six-pack, and she has $25 to spend. If her budget increases and she has $50 to spend on soda and movies, what is the change in the relative price of a movie ticket? How do the marginal utility per dollar from movies and the marginal utility per dollar from soda change?
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Lets analyze Erins spending on soda and movies with her initial budget of 25 a n d h e r i n c r e a s e d b u d g e t o f 25 a n d h e r i n c r e a ...View the full answer
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