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Jessica consumes only two goods: ginger ale (g ) and mandarin orange Izze ( m ). Her preferences over these two goods are given by
Jessica consumes only two goods: ginger ale (g ) and mandarin orange Izze ( m ). Her preferences over these two goods are given by U(g, m)=28 +6m. The price of ginger ale is $3, and the price of mandarin orange Izze is $6. Jessica's monthly income is $300. Knowing that she likes ginger ale, Jessica's brother gives her a gift certificate of $81 redeemable only at the Canada Dry ginger ale factory. Although Jessica is happy to get this gift, her brother did not realize that he could have made her exactly as happy by spending far less than he did. How much would he have needed to give her in cash to make her just as well off as with the gift certificate
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