Cindy has $70 a month to spend, and she can spend as much time as she likes playing golf and tennis. The price of an hour of golf is $10, and the price of an hour of tennis is

$5. The table shows Cindy’s marginal utility from each sport.                   

• Make a table that shows Cindy’s affordable combinations of hours playing golf and tennis. If Cindy increases her expenditure to $100, describe how her consumption possibilities change.

Hours playing golf	Hours playing tennis
0	14
1	12
2	10
3	8
4	6
5	4
6	2
7                                                                     0

• This table shows us the affordable combination of hours playing golf and tennis. By increasing the expenditure from $100, so if we enter hours to the tennis table the hours of playing the golf will be increased by 3 hours. If we enter hours to the golf the hours of playing the tennis will increase to 6.  The budget line of the Cindy will shift to right.
• How many hours of golf and how many hours of tennis does she play to maximize her utility?
•  
• Compared to part (2), if Cindy spent a dollar more on golf and a dollar less on tennis, by how much would her total utility change?
• Compared to part (2), if Cindy spent a dollar less on golf and a dollar more on tennis, by how much would her total utility change?
• Explain why, if Cindy equalized the marginal utility per hour of golf and tennis, she

would not maximize her utility.

Cindy’s tennis club raises its price of an hour of tennis from $5 to $10, other things remaining the same.

• List the combinations of hours spent playing golf and tennis that Cindy can now afford and her marginal utility per dollar from golf and from tennis.
• How many hours does Cindy now spend playing golf and how many hours does she spend playing tennis?
• Use the information in Problem 6 to draw Cindy’s demand curve for tennis. Over the price range of $5 to $10 an hour of tennis, is Cindy’s demand for tennis elastic or inelastic?
• Explain how Cindy’s demand for golf changed when the price of an hour of tennis increased from $5 to $10 in problem 6