Assume your mom loves buying clothes from JC Penny's and eating at the Dan'l Boone Inn....

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Assume your mom loves buying clothes from JC Penny's and eating at the Dan'l Boone Inn. In other words, both of these good are Superior. Suppose there is a deal at Dan'l Boone Inn this weekend where you get BOGO meal free (limit one per table). If your mom has M=$100 to spend, the dresses she wants PJCP=$50, and a meal at Dan'l Boone Inn costs PDBI=$25. Illustrate your mom's budget constraints with and without the BOGO meal free offer. Also, assuming she initially split her income equally between the two goods, illustrate how her optimal bundles and indifference curves with and without the BOGO meal free offer. Illustrate JC Penny's on the vertical axis. Hint: see the additional readings for CH 4 for more details about this type of problem. Assume your mom loves buying clothes from JC Penny's and eating at the Dan'l Boone Inn. In other words, both of these good are Superior. Suppose there is a deal at Dan'l Boone Inn this weekend where you get BOGO meal free (limit one per table). If your mom has M=$100 to spend, the dresses she wants PJCP=$50, and a meal at Dan'l Boone Inn costs PDBI=$25. Illustrate your mom's budget constraints with and without the BOGO meal free offer. Also, assuming she initially split her income equally between the two goods, illustrate how her optimal bundles and indifference curves with and without the BOGO meal free offer. Illustrate JC Penny's on the vertical axis. Hint: see the additional readings for CH 4 for more details about this type of problem.

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