(a) Draw the feasible (budget) set of the consumer who buys this bundle ticket and the budget set of the consumer who doesn't buy this bundle ticket, on the same graph, with all relevant intercepts, slopes, intersections and other points. (b) Calculate the optimal bundle for the consumer. Does she buy the bundle ticket or not? (c) If the bundle ticket for $2100 gave permission for x rides in general (rather than 1000), what should x at least be, so that she would prefer buying the bundle ticket (to not buying)?

(a) Draw the feasible (budget) set of the consumer who buys this bundle ticket and the budget set of the consumer who doesn't buy this bundle ticket, on the same graph, with all relevant intercepts, slopes, intersections and other points. (b) Calculate the optimal bundle for the consumer. Does she buy the bundle ticket or not? (c) If the bundle ticket for $2100 gave permission for x rides in general (rather than 1000), what should x at least be, so that she would prefer buying the bundle ticket (to not buying)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The figure below illustrates 3 indifference curves and two budget lines for a student whose budget for online gaming is $10/week. The red line illustrates this student's original budget line. After thanksgiving prices change, the blue (dash-dot) line illustrates the student's new (post-price change) budget line. a) What were the original hourly prices of FortDay and PokemonStop? What are the new prices? b) What is the students optimal bundle at the original prices? How about at the new prices?
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