Days of skiing per semester 7 6 5 4 1 W S Ms. Bain maximizes utility (given her budget constraint) at point X, skiing 2 days and spending 3 days horseback riding. Budget line T X U N Y Curve B Curve A Curve C V 0 1 2 3 4 5 6 7 Days of horseback riding per semester
Days of skiing per semester 7 6 5 4 1 W S Ms. Bain maximizes utility (given her budget constraint) at point X, skiing 2 days and spending 3 days horseback riding. Budget line T X U N Y Curve B Curve A Curve C V 0 1 2 3 4 5 6 7 Days of horseback riding per semester
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. At point S, the marginal utility of horseback riding per unit cost of horseback riding is higher than the marginal utility of skiing per unit cost of skiing.
2. Bundles S, T, and U are affordable
a. both statements are true
b. both statements are false
c. 1st statement is false, 2nd statement is correct
d. 1st statement is correct, 2nd statement is false.
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