Sumaiya, who consumes pepsi and pizza, gets a raise in her income from $300 to $400. Pepsi costs her $2 per glass and pizza costs $10. a. Show what happens to her optimal consumption point if both Pepsi and pizza are normal good? b. Show what happens if pizza is an inferior good.
Sumaiya, who consumes pepsi and pizza, gets a raise in her income from $300 to $400. Pepsi costs her $2 per glass and pizza costs $10. a. Show what happens to her optimal consumption point if both Pepsi and pizza are normal good? b. Show what happens if pizza is an inferior good.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
Problem 4QR
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Sumaiya, who consumes pepsi and pizza, gets a raise in her income from $300 to
$400. Pepsi costs her $2 per glass and pizza costs $10.
a. Show what happens to her optimal consumption point if both Pepsi and pizza
are normal good?
b. Show what happens if pizza is an inferior good.
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