You have $3,000 to spend on entertainment this year (lucky you!). The price of a day trip (T) is $40 and the price of a pizza and a movie (M) is $20. Suppose that your utility function is U(T,M) = T1/3M2/3.
a. What combination of T and M will you choose?
b. Suppose that the price of day trips rises to $50. How will this change your decision?