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Kevin likes to ski a lot. His utility function for days of skiing (s) and other goods (x) is U=10xs+10x, so his marginal utility of
Kevin likes to ski a lot. His utility function for days of skiing (s) and other goods (x) is U=10xs+10x, so his marginal utility of skiing is U_s=10x and his utility for other goods is U_x=10s+10. The price of ski lift ticket is p_s=100, and you can use a price of p_x=1 for other goods. Assume that Kevin has $1100 to allocate to skiing and goods. Which of the following statements are true? Question 23 Select all that apply: a. Assuming Kevin maximizes his utility, he will ski 5 days per year. b. Kevin would be made better off by a buy-one, get-one-free deal. c. If he were offered a deal to get 5 days of skiing for the price of 3, he would still ski 5 days but he'd be happier. d. If he were offered a deal to get 5 days of skiing for the price of 3, he would ski 6 days and he'd be happier. e. The increased price of gas increases his cost of ski days to increase to p_s=120 and has cut his disposable income to $1080. He would still want to buy 5 days of skiing for the price of 3 ($360)
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