. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the
Quantity |
Price per Download |
MU per download |
|
---|---|---|---|
Music downloads |
3 |
$3 |
60 |
Video downloads |
2 |
$3 |
45 |
As an assignment for her
Downloads of |
mu (score) from 1 to 100 |
Price of each $3.00 |
Money spent on |
Downloads of |
mu (score) from 1 to 100 |
Price of each $3.00 |
Money spent on |
Total Money |
Total Budget |
---|---|---|---|---|---|---|---|---|---|
music |
mu |
mu/$ |
music |
videos |
mu |
mu/$ |
videos |
Spent |
Remaining |
1st |
? |
? |
$3.00 |
1st |
? |
? |
$3.00 |
$6.00 |
$13.00 |
2nd |
? |
? |
2nd |
45 |
15 |
$3.00 |
$12.00 |
$7.00 |
|
3rd |
60 |
20 |
$3.00 |
3rd |
$15.00 |
$4.00 |
|||
4th |
4th |
Total money spent on music: $9.00
Total money spent on videos: $6.00
Total money spent: $15.00
Total budget remaining: $4.00
- A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is Matilda maximizing her utility? Explain your answer.
- Should Matilda consume one more video download, to move her closer to her optimum utility? Explain your answer.
- Should Matilda consume one less music download and one more video download, to move her closer to her optimum utility? Explain your answer.
- Should Matilda consume one more music download, to move her closer to her optimum utility? Explain your answer.
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