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

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