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?
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?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
Section: Chapter Questions
Problem 2SCQ: Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to...
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![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(TM) 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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42c409b1-9bf0-443e-bc3f-e3485ec017e6%2Fbcebbe24-9114-41ad-9989-7377368408eb%2Faetzcx_processed.png&w=3840&q=75)
Transcribed Image Text: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(TM) 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?
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