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Luis spends his money on two classes of good: healthy goods (fitness products, books, nutritious foods, etc.) which we call h, and unhealthy goods (cigarettes,
Luis spends his money on two classes of good: "healthy" goods (fitness products, books, nutritious foods, etc.) which we call h, and "unhealthy" goods (cigarettes, alcohol, junk food, etc.), which we call n. The price orhealthy and unhealthy goods is 1, i.e., pa = Da = 1. Luis has initial income 10. Suppose Luis' preferences are perfect substitutes, described by utility function u(ba) = 2h 3n. (a) What is Luis budget constraint? Illustrate with a figure
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