Simon has a monthly budget of $90 which they can spend on Movies and T-shirts.

1. If the price of a movies is $9 each, what is the maximum number of movies they could buy in a month?

2. If the price of a T-shirt is $18, what is the maximum number of T-shirts they could buy in a month?

3. Draw Simon's budget constraint with T-shirts on the horizontal axis and Movies on the vertical axis. What is the slope of the budget constraint?

4. What is Simon's opportunity cost of purchasing one T-shirts?

Problem 2:

Complete the consumer equilibrium problem shown below. You must complete the tables and answer the question below each table.

A. CONSUMER EQUILIBRIUM

Assume the price of a Happy Meal is $5 and the price of an exercise class is $10. Complete the following table.

Quantity of Happy Meals	Total Utility	Marginal Utility	MU/P	Quantity of Exercise Classes	Total Utility	Marginal Utility	MU/P
0	0	0	0	0	0	0	0
1	35			1	80
2	65			2	150
3	90			3	210
4	110			4	260
5	125			5	300

What combination will achieve consumer maximum equilibrium given a budget of $55 to spend?

B. Now assume the price of a Happy Meals stays $5 but the price of an exercise class increases to $12. Complete the table using the new prices.

Quantity of Happy Meals	Total Utility	Marginal Utility	MU/P	Quantity of Exercise Classes	Total Utility	Marginal Utility	MU/P
0	0	0	0	0	0	0	0
1	35			1	80
2	65			2	150
3	90			3	210
4	110			4	260
5	125			5	300

What combination will achieve consumer maximum equilibrium given the same budget of $55 to spend?