Sanjana loves to read books(B) and likes to watch movies(M) as well. She derives double the satisfaction from reading a book than watching a movie. Her utility function is as follows
U(B, M) = 2B + M
Where B and M are the number of books and movies respectively.
a. Explain the shape of the indifference curve using diagrams. [ Word limit: 200]
b. The income available with her is INR60. And price of movie ticket is INR 10 and that of a book is INR 15. Will she spend her entire budget and why? What will be her consumption, explain why? [Word limit: 300]
a. Since books and movies are perfect isabstitutes, the the indifference curve is a linear downwarding sloping. Besides, from the utility function, Sanajana's preference for books is twice as her her preference for movies. therefore the slope of the indifference curve is is -2.
b.
Therefore she will only consume books
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