Question: Jasper utility function for beer and pizza can be expressed as: U left parenthesis B comma P right parenthesis space equals space B cross times
Jasper utility function for beer and pizza can be expressed as: U left parenthesis B comma P right parenthesis space equals space B cross times P Suppose beer costs $5 per glass, pizzas cost $10 each, and Jasper has a total of $30 to spend. Assume Jaspeer is allowed to purchase fractional amounts of each good. Part A) Based on the above information, what is Jaspeer's optimal amount of beer? Enter the number below. Beer = 3 glasses Part B) Now suppose the price of beer falls from $5 down to $3. Calculate the following and fill in the blanks below. When necessary, round answers to two places after the decimal. (Hint: find the decomposition basket to calculate the substitution and income effects). Jasper's total effect on beer is to increase total consumption by 2 glasses of beer. Jasper's substitution effect is to increase beer consumption by 0 glasses of beer. Jasper's income effect is to increase beer by 2 glasses of beer
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