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What is the exact change in Jackie's consumer surplus, A + B? How large is area B? In this example, assume the price of music
What is the exact change in Jackie's consumer surplus, A + B? How large is area B? In this example, assume the price of music tracks (in pounds) increases from t0.6 to f0.75, as shown in the figure. Also, let Y be Jackie's income, which is f30. State Jackie's uncompensated demand function for music tracks given her initial budget. Jackie has a utility function, U (9 1 , 92) = 91 92 0.5 where q, is music tracks and q2 is live music. Let p, be the price of music tracks and let the price of live music be normalized to one. If income, Y, is 30, what is Jackie's uncompensated demand for music tracks, q, ? Jackie's uncompensated demand for music tracks, q,, as a function of p, is 91
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