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Unformatted text preview: Explain. d. How will you allocate your time between the three activities if your time is scarce? Explain. 4. Suppose John calculates his marginal utility for each hour he spends on his favorite activities: video games, basketball and studying. The table below provides the results. John’s Marginal Utility (MU) for Each Hour Spent on Weekend Activities (Total Utility in Parentheses) Hours Spent MU Video Games MU Basketball MU Studying 1 165 (165) 190 (190) 99 (99) 2 123 (288) 182 (372) 84 (183) 3 70 (358) 167 (539) 70 (253) 4 18 (376) 143 (682) 32 (285) 5 0 (376) 111 (793) 0 (285) 610 (366) 70 (863)8 (277) 7 32 (334) 25 (888)15 (262) a. Suppose John has 12 hours to spend on his three activities. How should John allocate his time in order to maximize his total utility? b. Suppose John has 14 hours to spend on his three activities. How should John allocate his time in order to maximize his total utility?...
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This note was uploaded on 02/17/2011 for the course ECN 203 taught by Professor Evensky during the Spring '07 term at Syracuse.
 Spring '07
 Evensky
 Opportunity Cost

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