Question 1 a,b,c,d

Econ 221 Problem Set 6 Complete the problems below in the space provided. PS6 is due on Tuesday, 5/2 for Econ 221-5206 and in class on Wednesday 5/3 for Econ 221-1220. It will stay open for a week with no late penalty. 1) Consumer Theory (6 points) Todd likes to go out on Friday nights, and prefers to either go to a concert or a movie. His summer budget constraint for these two activities is shown below. Todd's favorite concert venue charges $20 for general admission tickets, and movie tickets cost $12. Based on the budget constraint and the Concert tickets prices listed above, what is Todd's budget for Friday night activities this 10 summer? If Todd goes to 5 movies this summer, how many concert tickets can he buy? c. Suppose the price of a concert ticket decreases to $15. Draw Todd's new 2 budget constraint on the graph and label it BC2. BC What will happen to Todd's utility after 2 4 6 8 the price decrease? How do you know? 10 12 14 Movie tickets d. Now suppose that Todd's Friday night budget is cut in half and the price of movie tickets is still $15. Draw Todd's new budget constraint and label it BC3. What will happen to Todd's utility after the budget cut? How do you know