Faisal states that he does not care whether he drinks Coke or Pepsi “as long as...

Faisal states that he does not care whether he drinks Coke or Pepsi “as long as it is soda.” Assume that Faisal can spend $100 per month on soft drinks.

Does Faisal’s statement violate any of the properties we require for preferences? (4.1)
How many cans of Coke and Pepsi does Faisal consume, respectively, if the price of Coke is $4 per can and the price of Pepsi is $2.50 per can?
How does your answer change, if the price of Pepsi increases to $3? What if it increases to $5?
Illustrate your answers A) through C) graphically.

Expert Solution

Rahul Sunny answered 1 year ago

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