ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Kim has $24 per week in her entertainment budget. She splits her time between
going to the movies and yoga classes. Each movie costs $8 while each yoga class
costs $3. The total utility from each of these activities is set out in the table below
Movies Total Yoga
UtilityClassesUtility
Total
1
40
1
75
105
130
160
30
55
76
92
106
114
116
117
3
4
3
4
7
. What is Kim's total utility maximizing point? Hint: you can either calculate the
marginal utility per dollar spent or check which option leads to a higher total utility.
a) 0 movies, 8 yoga classes
O b) 1 movie, 5 yoga classes
c) 2 movies, 2 yoga classes
d) 3 movies, 0 yoga classes
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Transcribed Image Text:Kim has $24 per week in her entertainment budget. She splits her time between going to the movies and yoga classes. Each movie costs $8 while each yoga class costs $3. The total utility from each of these activities is set out in the table below Movies Total Yoga UtilityClassesUtility Total 1 40 1 75 105 130 160 30 55 76 92 106 114 116 117 3 4 3 4 7 . What is Kim's total utility maximizing point? Hint: you can either calculate the marginal utility per dollar spent or check which option leads to a higher total utility. a) 0 movies, 8 yoga classes O b) 1 movie, 5 yoga classes c) 2 movies, 2 yoga classes d) 3 movies, 0 yoga classes
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