Enrique is a movie buff. He likes to watch on demand movies fromhis cable company, which cost $5 each, and so likes to go tothe local movie house, which charges $15 a ticket. Suppose thatgiven his budget and his tentative spending plans, the marginalutility from a cable movie is 15 utils and the marginal utility of amovie at the local cinema is 45 utils.Assuming he is spending his entire budget,Enrique is currently maximizing his utilityEnrique can increase his utility by buying more cable moviesand watching fewer cinema moviesEnrique can increase his utility by buying more cinemamovies and fewer cable movies

Given the utility function of the consumer and the budget constraint that the consumer is subject…

Assuming he is spending his entire budget, Enrique is currently maximizing his utility Enrique can increase his utility by buying more cable movies and watching fewer cinema movies Enrique can increase his utility by buying more cinema movies and fewer cable movies

Assuming he is spending his entire budget, Enrique is currently maximizing his utility Enrique can increase his utility by buying more cable movies and watching fewer cinema movies Enrique can increase his utility by buying more cinema movies and fewer cable movies

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Tom has a budget of $44 per week that he can spend on Ramen and/or steak burritos. Each burrito costs $10 and each bowl of Ramen is $6. Using the table below, what combination of these two goods will maximize Tom’s utility given his budget constraint?
5. 7. 5. Bob budgets $24 a week for entertainment. He splits his time between going to the movies and going to the gym. Based upon the information contained below, find Bob's utility maximizing point. First: Complete the budget constraint. (Determine what combinations are possible.) Income: $24 Movie Price: $6 Gym Session Price: $3 Movies Gym Sessions Second: Complete this chart and use it to determine the utility maximizing point. Total MU MU per $ Gym Total MU Visits Utility Movies MU Utility per $ 0. 30 1 2, 50 5 85 76 115 4 92 4 107 111 114 5. 103 91 115 6. Thinking laterally: Forlunch. Maria eats onlv salads or vegetarian burgers, Her weekly fond bud sh (United States) 234 5
am. 113.
Mylie's total utility from singing the same song over and over is 70 utils after one repetition, 110 utils after two repetitions, 140 utils after three repetitions, 160 utils after four repetitions, 120 utils after five repetitions, and 60 utils after six repetitions, as shown in the table below. a. Write down her marginal utility for each repetition. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Repetitions 0 1 2 3 4 5 6 Total Utility Marginal Utility 0 70 110 140 160 120 60 b. Once Mylie's total utility begins to decrease, does each additional singing of the song hurt more than the previous song or less than the previous song? O More than the previous song O Less than the previous song
Refer to the table below. If the subscription price for a sports app is $2 per week, the subscription price of a game app is $1 per week, and a student has $9 per week to spend, what quantities will she purchase at a consumer optimum? Quantity of Sports Apps per week Marginal Utility (utils) Quantity of Game Apps per Week Marginal Utility (utils) 1 1,200 1 1,700 2 1,000 2 1,400 3 800 3 1,100 4 600 4 800 5 400 5 500 6 100 6 200
Gabriella obtains utility from consuming granola bars and cappuccino. The following table shows the total utility (TU) she obtains from consuming different amounts of the two goods. The price of a granola bar is $3 and the price of a cup of cappuccino is $2. She has allocated $9 to spend on granola bars and cappuccino. 1. Complete the table by calculating the marginal utility (MU) and the MU per dollar spent on each granola bar and cup of cappuccino. 2. What is Gabriella’s optimal consumption bundle of granola bars and cups of cappuccino?
There are only two brands of tennis balls Tom purchases: "Wilson" and "Penn." The more he purchases of a ball, the lower the marginal utility of that ball. He spends all of his income and his marginal utility of a "Wilson" is 6 and his marginal utility of an "Penn" is 12. The price of a "Wilson" ball is $1 and the price of an "Penn" is $2. Which of the statements is true based on the above information? Question 19 options: Tom could increase his satisfaction by a) trading "Wilson" for "Penn." In equilibrium, Tom must give up b) three "Penn" balls for two "Wilson" balls. Tom can increase his satisfaction by c) doing nothing Tom would be willing to give up two d) "Penn" balls for one "Wilson" ball.
A consumer has a budget set aside for entertainment during the year, and they spend the budget on concerts and plays. The consumer has a strong preference for attending concerts over plays: the two activities are substitutes, but not very strong substitutes. Sketch the indifference curves for this consumer on a graph, with concert tickets on the vertical axis and play tickets on the horizontal axis. Briefly explain why the consumer might ultimately choose to purchase a large number of play tickets, even though they have a strong preference for concerts. Include a budget line on your graph to illustrate this case.
Suppose you had a budget of $20.00 and the prices of a burger and a slice of pizza are $4.00 and $2.00 respectively. What is the marginal utility per dollar spent for the fourth burger?
The table shows the total utility (TU) that James receives from consuming different amounts of two goods X and Y, per month. Quantity TUx MUx MUx/Px TUy MUy MUy/Py 0 0 0 0 0 0 0 1 50 50 16.67 75 75 25.00 2 88 38 12.67 117 42 14.00 3 121 33 11.00 153 36 12.00 4 150 29 9.67 181 28 9.33 5 175 25 8.33 206 25 8.33 6 196 21 7.00 225 19 6.33 7 214 18 6.00 243 18 6.00 8 229 15 5.00 260 17 5.67 9 241 12 4.00 276 16 5.33 d.How much total utility will James experience by buying the utility-maximizing combination? e.Suppose the price of good Y increases to $6. How many units of X and Y will he buy to maximize his utility now?
Suppose the marginal utility of a Coke is 15 utils, and its price is $1.50. The marginal utility of a pizza is 20 utils, and its price is $5. To achieve consumer equilibrium, you need to spend
Alex, who was convinced that "Football is coming home", was very excited for the World Cup last year. Unfortunately, he realized that his favourite Paul Gascoigne jersey from Euro 1996 was getting old, so he wanted to buy a new one before England's first game the following week. He could either buy a 2014 James Milner shirt from retailer A, which would make him totally happy (utility=1), or a 2006 David Beckham shirt from retailer B, which gives him a utility of 0.8. However, the shirts are not available today. There is a 50% chance that retailer A will have the shirt on the week-end, and 70% chance that retailer B will have theirs on the week-end. Due to time and work constraints, Alex can only visit one of these retailers before the tournament starts, otherwise he will have to keep his old 1996 shirt, which gives him a utility of 0.5. He can also ask his friend Nathan to check both places in the morning. But being a Welsh supporter, Nathan will not do it for free and wants some money…