Virginia Tech MKTG MKTG MISC Consider a high school student who is given $3 every school day by…
Consider a high school student who is given $3 every school day by her parents as “lunch money.” The student works a part time job after school, earning a small amount of “spending cash.” In addition to her lunch money, the student spends $5 from her own earnings each week on lunch. Suppose her parents reduced her lunch money by $2 per day but that she simultaneously receives a $10-per-week raise at her job, requiring no extra effort on her part. What would the rational choice model suggest should happen to her spending on lunch?
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