Dave has $300 to spend each month on pizzas and online movies. Pizzas and movies both currently
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Dave has $300 to spend each month on pizzas and online movies. Pizzas and movies both currently have a price of $10, and Dave is maximizing his utility by buying 20 pizzas and 10 movies. Suppose he still has $300 to spend, but the price of a pizza rises to $12, while the price of a movie drops to $6. Is he better or worse off than he was before the price change? Use a budget constraint–indifference curve graph to illustrate your answer.
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