What is thurstons optimal consumption choice

Reference no: EM13189452

suppose thurston, a color blind consumer, has 80$ to spend on either lime green or pink sweater. Thurston does not care what color sweater her wears but deems it very important to buy as many sweater as possible with the 80 $. Pink sweater cost 20$ and lime green cost 40$.
a) draw Thurston's bugdet line and indifference map. What is Thurston's optimal consumption choice?
b)A sale on pink sweaters begins: if a consumer buys two pink sweaters at a regular peice, he can get two additional pink sweaters for free. Two pink sweaters must be purchased to get the deal. Otherwise prices are unchanged. With the sale, depict Thurston's new budget line and preffered consumption choice.

Reference no: EM13189452

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