What is her optimal bundle

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Reference no: EM13146693

Kate’s preferences over Diet Coke (good 1) and generic diet cola (good 2) are perfect substitutes, but she prefers Diet Coke to generic diet cola. She is always willing to trade 2 Diet Coke’s for 1 generic diet cola. Suppose Kate has 15 dollars, and six-packs of Diet Coke sell for $3 and six packs of generic diet cola sell for $1. Graph Kate’s budget constraint and some representative indifference curves. What is her optimal bundle?

Reference no: EM13146693

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