George has US$200 to spend each month on restaurant meals and jazz performances at his neighborhood jazz club. The price of a typical restaurant meal is US$20 and the price of a jazz performance ticket is US$10. George is maximizing his utility by consuming six restaurant meals and attending eight jazz performances. Suppose George still has US$200 to spend, but the price of a restaurant meal rises to US$25, while the price of a jazz performance ticket drops to US$8. Is George better or worse off than he was before the price change? Use a budget constraint/indifference curve graph to illustrate your answer.

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The Answer of George has US$200 to spend each month on restaurant meals and jazz performances at his neighborhood jazz club. The price of a typical restaurant meal is US$20 and the price of a jazz performance ticket is US$10. George is maximizing his utility by consuming six restaurant meals and attending eight jazz performances. Suppose George still has US$200 to spend, but the price of a restaurant meal rises to US$25, while the price of a jazz performance ticket drops to US$8. Is George better or worse off than he was before the price change? Use a budget constraint/indifference curve graph to illustrate your answer.

George Has US$200 to Spend Each Month on Restaurant Meals