Question
1. Consider a household that has $300 to spend on back-to- school shoes. They visit one of the discount shoe stores where shoes are
1. Consider a household that has $300 to spend on back-to- school shoes. They visit one of the discount shoe stores where shoes are buy one pair for $50, get the second half off. a. Draw the budget constraint that this family faces. Be sure to label axes and use numbers where possible. b. Add three dots to show three different consumption bundles, A, B, and C. c. Under what conditions might a household choose each of these bundles? d. Would it ever be rational for someone to purchase an odd pair of shoes?
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Managerial Economics and Strategy
Authors: Jeffrey M. Perloff, James A. Brander
1st edition
978-0137036059, 133379094, 321566440, 137036051, 9780133379099, 978-0321566447
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