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Natasha derives utility from attending rock concerts (r) and from colas (c) as follows: U(c,r) cr.1. The marginal utility of cola (MUC) and the
Natasha derives utility from attending rock concerts (r) and from colas (c) as follows: U(c,r) cr.1. The marginal utility of cola (MUC) and the marginal utility of rock concerts (MUr) are: MUC = 9c-11 MUT = .10-9--9 Let the price of cola (Pc) be $1, the price of concert tickets (Pr) be $30 and Natasha's income be $300. Suppose that the promoters of rock concerts require each fan to buy 4 tickets or none at all. Under this constraint how many colas and tickets should Natasha buy to maximize utility?
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Answer Heres the approach Identify the Constraint We know Natasha can either buy 4 tickets bundled p...
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Public Finance A Contemporary Application of Theory to Policy
Authors: David N Hyman
11th edition
9781305474253, 1285173953, 1305474252, 978-1285173955
