Draw a graph with arcade games on the horizontal axis and newspapers on the vertical axis. Joe has $10 per week to allocate between these commodities. The price of newspapers is $0.50. At the initial price for arcade games of $0.25, Joe purchases 10 newspapers and plays 20 games. When the price of games increases to $0.50, Joe purchases 8 newspapers and plays 12 games. When the price of games increases again to $0.75, Joe buys 5 papers and plays 10 games.
a. Use this information to draw the utility maximizing points on a graph.
b. Draw the price-consumption curve.
c. Draw the individual demand curve for arcade games.
d. Use the information given to calculate Joe's elasticity of demand for arcade games between $0.25 and $0.50, and between $0.50 and $0.75.