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Rita has a budget of 600 to spend on theatre tickets () and on restaurant meals 0. Each theatre ticket is priced at 60 (denoted

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Rita has a budget of 600 to spend on theatre tickets () and on restaurant meals 0. Each theatre ticket is priced at 60 (denoted by ), whereas the price of a restaurant meal () is 30. Her utility function is , which gives marginal utilities and . Her indifference curves are convex to the origin. to] Find the equation of Rita's budget line. Explain how Rita decides to spend her budget with the aid of a diagram. [6 marks] {b} Find the number of theatre tickets and restaurant meals Rita purchases. [5 marks] {a Rita receives a pay rise and so increases her budget for theatre tickets and restaurant meals to 660. Find the number of theatre tickets and restaurant meals Rita now purchases. [6 marks] a] For Rita are theatre tickets and restaurant meals normal goods, inferior goods or not associated with income? [6 marks]

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