ECON.TODAY (COMPLETE)-TEXT ONLY
ECON.TODAY (COMPLETE)-TEXT ONLY
18th Edition
ISBN: 9780133882285
Author: Miller
Publisher: PEARSON
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Chapter 20, Problem 7P
To determine

You determine that your daily consumption of soft drinks is 3 and your daily consumption of tacos is 4 when the prices per unit are 50cents and $1, respectively. Explain what happens to your consumption bundle, and, after your consumption choices adjust, to the marginal utility of soft drinks and the marginal utility of tacos, when the price of soft drinks rises to 75 cents.

Content information: Budget constraint represents combinations of goods and services that can be purchased at given prices and a fixed level of income. Budget constraint is given by.

m=Px×X+Py×Y.

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