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Economics 1021A Chapter 8

Bowling 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 0 50 88

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Unformatted text preview: 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 Movies Bowling Total utility Quantity from movies per month Total utility and bowling per month Games Total utility a 0 0 291 291 10 b 1 50 310 260 8 c 2 88 313 225 6 d 3 121 302 181 4 e 4 150 267 117 2 f 5 175 175 0 0 Maximizing Utility 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 OR Price of bowling MUm Pm = MUb 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 per Dollar Spent Movies ($6 each) Marginal utility Marginal per dollar Quantity utility spent 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 0 Marginal u...
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