Mr. Zeebon Allows Himself To Spend $400 Per Month On Gummy Bears And Cereal. His Preferences For Gummy Bears And Cereal Do Not Change Throughout The Year. 1st Attempt Part 1 (0.3 Point) See Hint In January, The Price Of Gummy Bears Was $2 Per Bag, While Cereal Was $4 Per Bowl. Faced With These Prices, Mr. Zeebon Bought 60 Bowls Of Cereal And 80 Bags Of Gummy

 

 

Mr. Zeebon allows himself to spend $400 per month on gummy bears and cereal. His preferences for gummy bears and cereal do not change throughout the year. 1st attempt Part 1 (0.3 point) See Hint In January, the price of gummy bears was $2 per bag, while cereal was $4 per bowl. Faced with these prices, Mr. Zeebon bought 60 bowls of cereal and 80 bags of gummy bears. In February, Mr. Zeebon again had $400 to spend and cereal still cost $4 per bowl, but the price of gummy bears rose to $2.50 per bag. Mr. Zeebon consumed 60 bowls of cereal and 64 bags of gummy bears. The substitution effect of this price change would make him buy fewer bags of gummy bears and the same bowls of fried cereal.