Question
Consumer Choice: You have a fixed budget and you have two amusement park rides to choose from,--thundering roller coaster(adrenaline pumping) and rocket ship (not so
Consumer Choice: You have a fixed budget and you have two amusement park rides to choose from,--thundering roller coaster(adrenaline pumping) and rocket ship (not so exciting)
Number of Times Riding | Total Utility Roller Coast(Unit-utils points) | Marginal Utility Roller Coast (Fill in) | MU/Price Riding Roller Coast(Price=$4) (Fill in) | Total Utility Rocket(utils) | Marginal Utility (Fill in) | MU/Price Rocket (Price=$2) Fill in) |
1 | 120 | 30 | ||||
2 | 200 | 50 | ||||
3 | 240 | 66 | ||||
4 | 272 | 74 | ||||
5 | 288 | 78 | ||||
6 | 292 | 80 | ||||
Assumptions:
You have a fixed budget of $16
The cost of riding roller coast is $4(imputation for wait time)
The cost of riding the rocket ships is $2(imputation for wait time)
Questions:
Find the optimal consumption point (how many times would you ride the roller coast, how many times would you ride the rocket ship)
What is the rule you used to determine the optimal consumer choice?
What is the total utility associated with your optimal consumer choice?
How does this compare to other possible combinations?
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