Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that Biff enters a hot dog eating contest. He enjoys hot dogs, so he gladly pays the $20 entry fee. Biff realizes there

image

Suppose that Biff enters a hot dog eating contest. He enjoys hot dogs, so he gladly pays the $20 entry fee. Biff realizes there is very little chance that he will actually win the contest. He just likes the idea of being able to eat all the hot dogs he wants. The table below shows Biff's utility from eating hot dogs. Instructions: Enter your answers as a whole number. If you are entering a negative number include a minus sign. a. Use the table below and fill in the values for marginal utility. Hot Dogs and Biff's Utility Hot Dogs Total Utility (utils) Marginal Utility (utils) 1 56 2 60 3 63 4 65 5 6 64 61 b. If Biff is rational, and has no intention of winning the hot dog eating contest, what is the optimal number of hot dogs he will eat? What is the maximum level of utility Biff can reach from eating that number of hot dogs? Optimal number of hot dogs: Maximum utility:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

a To find the marginal utility we need to calculate the change in total u... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

PDF file Icon
663d7a730e87f_966493.pdf

180 KBs PDF File

Word file Icon
663d7a730e87f_966493.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Karen W. Braun, Wendy M. Tietz

4th edition

978-0133428469, 013342846X, 133428370, 978-0133428377

More Books

Students also viewed these Finance questions

Question

1 How many functions exist with f(x1,...,xn) = f(x1,...,xn)?

Answered: 1 week ago