4 Gmail 5133 PM Sun 26 Sep '. 5? G} 97% 4 6 1005121 Thai L; 6 C' X III 1101105 Scienc X El 1201101 Found: X El Classwork for 1: classroom.google.com Q, [1" B Exercise: Household behavior and consumer choice 1. 2. Suppose you would to nd a new dormitory, please list 3 choices under budget constraint. 3) What is your earning per month? b) Fulll the cost in the table Other Available expenses Yes / N0 Yes / NO c) What option do you want to choose? Why? Smith made a resolution to save money. He decided that he would strictly budget $100 for lunches each month. For lunch he has only two options: the faculty clubs, where the price of a lunch is $5, and Alice Restaurant, where the price of a launch is $10. a) Assuming that Smith spends the entire $100 each month at either Alice or the club, sketch his budget constraint. Show actual numbers on the axes. b) Last month Smith chooses to eat at the club 10 times and at Alice's 5 times. Does this choice t within his budget constraint? c) Last month Alice ran a half price lunch special all month. All lunches were reduced $5. Show the effect on Smith budget constraint. . Assume that Joe has $64 to spend on books and movies each month, and that both goods must be purchased whole (no fractional units). Movie cost $8 each, while a book cost $16 each. Joe's preferences for movies and books are summarized by the following information: No .per TU month 21) Fill in the gures for marginal utility and marginal utility per dollar for both movies and books b) Are these preferences consistent with the \"law of diminishing marginal utility\"? Explain briey. 0) Give the budget of $64, what quantity of books and movies will maximize Joe's level of satisfaction? Explain briey. Page 1 of 2 X +