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(1) Todd has $200 that he can spend on soda and bus tickets. A pack of soda costs $15. All citizens receive a coupon from
(1) Todd has \$200 that he can spend on soda and bus tickets. A pack of soda costs \$15. All citizens receive a coupon from the government that gives people 30% off on their first 15 soda pack purchases. Bus tickets cost $10 and the government charges $2 for each purchased bus ticket. Todd's utility function is U(s,b)=15s+18b where s represents soda and b represents bus tickets. What is Todd's optimal consumption of soda and bus tickets? (2) What is Todd's optimal consumption if the government removes the quantity restriction of the coupon for soda (for example, 30% off is applied to any quantity of Soda purchased)? (1) Todd has \$200 that he can spend on soda and bus tickets. A pack of soda costs \$15. All citizens receive a coupon from the government that gives people 30% off on their first 15 soda pack purchases. Bus tickets cost $10 and the government charges $2 for each purchased bus ticket. Todd's utility function is U(s,b)=15s+18b where s represents soda and b represents bus tickets. What is Todd's optimal consumption of soda and bus tickets? (2) What is Todd's optimal consumption if the government removes the quantity restriction of the coupon for soda (for example, 30% off is applied to any quantity of Soda purchased)
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