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?
1
Expert's answer
2021-12-05T18:49:12-0500
Now here MRS = MUB/MUM = 2
And slope of budget line is, 15/10 = 1.5
Therefore,
MRS> PB/PM
And so only books will be consumed that is, B*= 60/15 = 4 units and M*= 0 unit's that is movies will not be consumed
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