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# Suppose Charlie Parker CDs cost \$10 apiece and Lester Young CDs cost \$5 apiece. You have \$40 to spend on CDs. The marginal utility that you derive...

Suppose Charlie Parker CDs cost \$10 apiece and Lester Young CDs cost \$5 apiece. You have \$40 to spend on CDs. The marginal utility that you derive from additional CDs is as follows:
NUMBER of CDS Charlie Parker Lester Young
Have 0 buy number 1 60 30
Have 1 buy number 2 40 28
Have 2 buy number 3 30 24
Have 3 buy number 4 20 20
Have 4 buy number 5 10 10

How many of each CD would you buy? Suppose the price of a Lester Young CD rises to \$10. How many of each CD would you buy? Use this to show how the principle of rational choice leads to the law of demand.

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