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7. Zhang is a college student who has $200 of extra spending money each semester. She uses it to either go to the movies or

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7. Zhang is a college student who has $200 of extra spending money each semester. She uses it to either go to the movies or order pizza. A pizza costs $8. The price of a movie ticket is $10 for a student. a. Graph Zhang's budget constraint for the semester. b. Now, suppose Zhang's parents give her a $50 gift certificate for the movie theater. Graph Zhang's budget constraint when she has the gift certificate in addition to her $200 of spending money. (Draw it on the same graph as a.) c. Assuming Zhang's indifference curves reflect a diminishing marginal rate of substitution and in both scenarios she decides to go to at least one movie, can you tell if Zhang is more, less, or equally happy with the gift certificate? Briefly explain. d. Zhang's girlfriend has already graduated from college and no longer has a student ID. Her girlfriend has to pay $12 to join her at the movies. What type of price discrimination is this

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