Alisha has a monthly entertainment budget of rupees 1000 which she divides between going to a movie theatre or attending a music concert. The price of a movie ticket is rupees 100 and that of a concert is rupees 200. At this budget she watches 6 movies and attends 2 concert a month. Suppose now that she decides to increase her entertainment budget to rupees 1600. At the new budget she watches 4 movies and attends 6 concerts.  a) Draw Income consumption curve taking movies on X axis and concerts on the Y axis . b) What is the nature of the two goods. Explain.

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
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Alisha has a monthly entertainment budget of rupees 1000 which she divides between going to a movie theatre or attending a music concert. The price of a movie ticket is rupees 100 and that of a concert is rupees 200. At this budget she watches 6 movies and attends 2 concert a month. Suppose now that she decides to increase her entertainment budget to rupees 1600. At the new budget she watches 4 movies and attends 6 concerts. 

a) Draw Income consumption curve taking movies on X axis and concerts on the Y axis .

b) What is the nature of the two goods. Explain. 

 

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