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Ch. 8 Utility and Demand

# Utility per lisas total s utility from movies and

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Unformatted text preview: and Bowling and 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 0 50 88 121 150 175 196 214 229 241 250 256 259 261 262 0 75 117 153 181 206 225 243 260 276 291 305 318 330 341 Lisa's Utility-Maximizing Combination Combination Movies Bowling Bowling Total utility Total Quantity from movies per month Total utility and bowling per month per Games Total utility a 0 0 291 291 10 b 1 50 310 260 8 c 2 2 88 88 313 225 225 6 d 3 121 302 181 4 e 4 150 267 117 2 f 5 175 175 0 0 Maximizing Utility Maximizing The marginal utility per dollar spent is the marginal utility obtained from the last unit of the good, divided by its price. Marginal utility from movies = Price of a movie Marginal utility from bowling Price of bowling OR MUm Pm = MUb MU Pb Q 1 2 3 4 5 6 7 8 9 10 Movies - \$6 MU MU / \$ 50 8.33 38 6.33 33 5.50 29 4.83 25 4.17 Bowling - \$3 MU MU / \$ 75 25.00 42 14.00 36 12.00 28 9.33 25 8.33 19 6.33 18 6.00 17 16 15 5.67 5.33 5.00 Equalizing Marginal Utilities Equalizing per Dollar Spent per Movies (\$6 each) Marginal utility utility Marginal per dollar Quantity utility spent Quantity a b c c d e f 0 1 2 2 3 4 5 0 50 38 38 33 29 25 8.33 6.33 6.33 5.50 4.83 4.17 Bowling (\$3 per game) Marginal Quantity utility 10 8 6 6 4 2 0 15 17 19 19 28 42...
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