(Solution) - In Figure we assumed that when Maxs -(2025 Original AI-Free Solution)

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In Figure, we assumed that when Maxs income rose, his marginal utility values for any given number of movies or concerts remained the same.

But now suppose that when Maxs income rises, and he can consume more movies and concerts, an additional movie has less value to Max than before. In particular, assume that Maxs marginal utility values are as in the table below. Fill in the blanks for the missing values, and find Maxs utility maximizing combination of concerts and movies. In Figure in the chapter, locate the new combination as a point on the $200 budget line. (It will not be one of the labeled points.) With these new marginal utility values, is one of the two goods inferior? Explain.