What combination of t and m will you choose

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Reference no: EM131184632

You have $3,000 to spend on entertainment this year (lucky you!). The price of a day trip (T) is $40 and the price of a pizza and a movie (M) is $20. Suppose that your utility function is U(T,M ) 5 T1/3M2/3.

a. What combination of T and M will you choose?

b. Suppose that the price of day trips rises to $50. How will this change your decision?

Reference no: EM131184632

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