Elizabeth makes $300 a week at her part time job and spends her entire weekly
Elizabeth makes $300 a week at her part time job and spends her entire weekly income on new running shoes and designer jeans, since these are the only two items that provide utility to her. Furthermore, Elizabeth insists that for every pair of jeans she buys, she must also buy a pair of shoes (without the shoes, the new jeans are worthless). Therefore, she buys the same number of pairs of shoes and jeans in any given week.a)If jeans cost $25 and shoes cost $25, how many will Elizabeth of each?b)Suppose that the price of shoes rises to $50 a pair, other things being equal, how many shoes and jeans will she buy?c)Show your results by graphing the budget constraints from part a) and part b). Also draw Elizabeth??s indifference curves.
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