Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing
one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing
(y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours.
Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activities. He currently exhausts this entire budget by watching two movies and visiting the climbing
gym fifteen times. With this monthly budget, he would also have been able to afford exactly
seven movies and six visits to the climbing gym.
Assume that both goods are perfectly divisible.
(b) Show, using algebra, that Ronald’s two budget lines intersect at the bundle (x, y) =
(5.5, 8.7).
Step by step
Solved in 3 steps with 16 images
