Ef1

1. [Consumer Theory - Livestream vs Concert] | Isabella loves music. She is deciding how many live concerts (L) to view after she acquires her vaccine. She can also view a pre-recorded concert on YouTube (YT). We will assume $5 represents the total cost of her time of watching a YouTube concert. The total cost of going to a live concert, including time and ticket is $50. Isabella has $1400 available from her recent stimulus check to spend on music. a. Isabella's utility function is, Ulsabella = 10(L)-9(YT).1. The marginal utilities are Muisabella = 9 (MT)"and MUisabella = ()". Graph 13pbella's indifference curves and budget constraint. Place the live concert on the horizontal axis. i. Identify the utility maximizing budget. ii. Calculate the budget constraint's intercept on the horizontal axis. ili. Interpret it. b. Assume her YouTube and Live Concert viewing are equal (YT = L). Which good yields a higher marginal utility? By how much? C. How many indifference curves does Isabella possess? d. Using the tangency condition and the budget constraint, calculate Isabella's utility maximizing music consumption bundle. e. Despite the tremendous difference in marginal utility, why does Isabella consume nearly equal amounts of both types