Question
There is a demand curve of pizza for this individual contains the following 2 points: PQ $10 6 $5 12 This person has $150 in
There is a demand curve of pizza for this individual contains the following 2 points:
PQ
$10 6
$5 12
This person has $150 in income and chooses to buy 30Dr. Pepperswhen the price ofpizzais $10 and when the price ofpizzais $5. Draw the budget constraint when the price of pizza P = $5 and when the price of pizza P = $10. Draw both of these budget constraints together on a new graph, but not the same graph as in (a). Specifically label the intercepts of each constraint. Find the coordinates of the utility maximizing point on each budget and draw the indifference curve through that point. Finally, find the MRS at each of the optimal points.
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