John enjoys ordering out for pizza and renting movies online. He makes $30 each week at a

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John enjoys ordering out for pizza and renting movies online. He makes $30 each week at a part-time job. If movies cost $2 per rental, and pizza costs $7.50 per slice, graph John's budget constraint. Then, illustrate the effects of each of the following events:
a. John's mother finds a coupon good for one free pizza, and gives it to John.
b. The company that John rents movies from sponsors a holiday week promotion: Rent the first five movies at regular price; and all movies after the fifth are half-off.
c. John's favorite pizza place increases the price of pizza from $7.50 to $10.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
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Microeconomics

ISBN: 978-1464187025

2nd edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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