Utility maximization
Not what you're looking for?
A consumer buys five new college textbooks during his first year at school at a cost of $80 each. Used books cost only $50 each. When the bookstore announces that there will be a 10% increase in the price of new books and a 5% increase in the price of used books, the consumer's father offers him $40 extra. Is this consumer worse or better off after the price change? Explain.
Purchase this Solution
Solution Summary
Utility maximization is evaluated.
Solution Preview
Your original question is a little vague but I interpret it to mean that:
In the original scenario the student buys books at $80 and after the price increase buys them for $88 each.
If he is only buying the ...
Purchase this Solution
Free BrainMass Quizzes
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.