Course: Microeconomics - Consumer Rational Choice, Ch. 3

From Robert Frank's Book of Microeconomics

You have the option of renting a car by the day - at $40 per day - or by the week - at $200 per week. a) Draw the budget constraint corresponding to a budget of $360 per trip. b) Find the best affordable basket if your preferences for travel are such that you require other goods (called "compound goods") worth exactly $140 for each day's consumption of a rented car. c) Suppose now that he considers one day's consumption of the rented car to be a PERFECT SUBSTITUTE for the other goods worth $35.