You have decided to spend $40 this month on CDs and movies. The total benefits you receive

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You have decided to spend $40 this month on CDs and movies. The total benefits you receive from different quantities of CDs and movies are shown in the table below. The price of a CD is $10 and the price of a movie is $10.
You have decided to spend $40 this month on CDs

a. Complete columns B, C, E, and F in the table above.
b. What combination of movies optimizes your total benefit? Explain your reasoning.
c. Suppose the local movie theater decides to offer a student discount, and as a result, the price of a movie falls to $5. If the price of CDs remains $10 and you continue to spend $40 on CDs and movies, what combination of movies optimizes your total benefit? Explain your reasoning.

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Microeconomics

ISBN: 978-1292079578

Global Edition 1st Edition

Authors: David Laibson, John List

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