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Problem 5A-10 Calculate income and substitution effects of a change in price of movie rentals. Anna has a weekly allowance of C72, all of which
Problem 5A-10 Calculate income and substitution effects of a change in price of movie rentals. Anna has a weekly allowance of C72, all of which she spends on music downloads (D) and movie rentals (M). Her utility function is U(D,M) = D1/2 + M1/2. The price of music downloads is E1/album. The price of movie rentals increased from E1/movie to E2/movie. Calculate the income and substitution effect of the price rise. (Enter your answer rounded to 2 decimal places (e.g., 32.16). Enter O if necessary. Answers should be positive, do not include negative numbers or minus signs.) Substitution effect: Income effect
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