Question

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 numbers of books and movies respectively. The income available with her is INR60. And the price of a 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?

Answer 1

We will solve it with the help of the budget line