The prices of good A and good B are $3 and $2 respectively. Theodore has a budget of $29 to alternate between the two. Currently, his consumption choices are 7 units of good A and 4 units of good B. If at one point he is given $5 to spend exclusively on good A, how would this affect his budget constraint? What is Theodore's bliss point if he now consumes 8 units of good A and 5 units of good B as a result?

The prices of good A and good B are $3 and $2 respectively. Theodore has a budget of $29 to alternate between the two. Currently, his consumption choices are 7 units of good A and 4 units of good B. If at one point he is given $5 to spend exclusively on good A, how would this affect his budget constraint? What is Theodore's bliss point if he now consumes 8 units of good A and 5 units of good B as a result?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 23SQ

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