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Tshilidzi has R400 per week available to spend on beer and cigarettes. Beer costs 20 per bottle and cigarettes cost 80 per packet. Suppose Tshilidzi
Tshilidzi has R400 per week available to spend on beer and cigarettes. Beer costs 20 per bottle and cigarettes cost 80 per packet. Suppose Tshilidzi buys 8 bottles of beer and 3 packet of cigarettes and in his marginal utility from beer is then 20 utils and that from cigarettes 35 utils. Is he equilibrium? If not, should he buy more beer or more cigarettes?explain.
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