2) Consider a consumer with $100 to spend on entertainment. She can either go to San...
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2) Consider a consumer with $100 to spend on entertainment. She can either go to San Jose Sharks' hockey games at a cost of $20 per game or go to the movies at a cost of $10 per movie. The following table shows the marginal utility she obtains from going to the first, second, third, fourth and fifth movie or hockey game: Quantity Marginal Utility from 1 2 3 4 5 Hockey Game 3,000 2,000 1,000 500 100 Marginal Utility from Movie 1,000 750 620 500 125 Is the consumer maximizing her utility by going to 4 hockey games and 2 movies? Explain your answer using the table above. If she is not maximizing her utility, find the utility maximizing consumption bundle. 2) Consider a consumer with $100 to spend on entertainment. She can either go to San Jose Sharks' hockey games at a cost of $20 per game or go to the movies at a cost of $10 per movie. The following table shows the marginal utility she obtains from going to the first, second, third, fourth and fifth movie or hockey game: Quantity Marginal Utility from 1 2 3 4 5 Hockey Game 3,000 2,000 1,000 500 100 Marginal Utility from Movie 1,000 750 620 500 125 Is the consumer maximizing her utility by going to 4 hockey games and 2 movies? Explain your answer using the table above. If she is not maximizing her utility, find the utility maximizing consumption bundle.
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ANSWER Given Consumers total Expenditure on Entertainment 100 Hockey Game Cost 20game Movies 10 Solu... View the full answer
Related Book For
Macroeconomics Principles Applications And Tools
ISBN: 9780134089034
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
Posted Date:
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