HW_ch7 - (c) The price of soda increases to $10. What is...

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Homework Question for Chapter 7 1. The price of Soda is $5 and the price of Pizza is $10 and a budget constraint of $40 to spend and that Mandi’s preferences are given by the table below answer the following questions. Quantity Marginal Utility Quantity Marginal Utility of Soda from Soda of Pizza from Pizza 1 150 1 200 2 120 2 180 3 100 3 150 4 90 4 120 5 60 5 100 6 40 6 60 (a) Graph the budget constraint faced by Mandi. (4pts) (b) What is Mandi’s maximum level of utility given her budget constraint? How many pizzas and sodas does she consume at this level of utility?
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Unformatted text preview: (c) The price of soda increases to $10. What is Mandis new utility maximization level of pizza and soda consumption? (d) Draw the demand curve for soda providing specic points. (e) The price of pizza increases to $20, while preferences and prices remain unchanged from (b). Plot point E on the graph drawn in (d). Point E is the new utility maximizing quantity of soda, assume that soda is a normal good....
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