Jake has a budget of $10 per week to spend on song downloads and cookies. The table shows his marginal utility from each good. Quantity per week Marginal utility from a song Marginal utility from a cookie 1. If the price of a song is $1 and the price of a cookie is $2, what are the quantities of songs and cookies that exhaust Jake's budget? 1 14 20 Which of the following quantities of songs and cookies exhaust Jake's budget? 12 16 O A. 6 songs and 2 cookies or 3 songs and 4 cookies O B. 2 songs and 3 cookies or 6 songs and 2 cookies 3 11 12 4 10 9 O C. 8 songs and 1 cookie or 4 songs and 3 cookies O D. 4 songs and 3 cookies or 3 songs and 4 cookies 6. 8 3 7 7 8 6
Jake has a budget of $10 per week to spend on song downloads and cookies. The table shows his marginal utility from each good. Quantity per week Marginal utility from a song Marginal utility from a cookie 1. If the price of a song is $1 and the price of a cookie is $2, what are the quantities of songs and cookies that exhaust Jake's budget? 1 14 20 Which of the following quantities of songs and cookies exhaust Jake's budget? 12 16 O A. 6 songs and 2 cookies or 3 songs and 4 cookies O B. 2 songs and 3 cookies or 6 songs and 2 cookies 3 11 12 4 10 9 O C. 8 songs and 1 cookie or 4 songs and 3 cookies O D. 4 songs and 3 cookies or 3 songs and 4 cookies 6. 8 3 7 7 8 6
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 16E
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Transcribed Image Text:Jake has a budget of $10 per week to spend on song downloads and cookies. The table shows his marginal utility from each good.
Quantity per
week
Marginal utility
from a song
Marginal utility
from a cookie
1. If the price of a song is $1 and the price of a cookie is $2, what are the quantities of songs and cookies that exhaust Jake's budget?
1
14
20
Which of the following quantities of songs and cookies exhaust Jake's budget?
12
16
O A. 6 songs and 2 cookies or 3 songs and 4 cookies
11
12
4
10
O B. 2 songs and 3 cookies or 6 songs and 2 cookies
9.
4
C. 8 songs and 1 cookie or 4 songs and 3 cookies
3
O D. 4 songs and 3 cookies or 3 songs and 4 cookies
7
7
2
8
1
O O
Transcribed Image Text:Max has $35 a day to spend on windsurfing and snorkeling and he can spend as much time as he likes doing them. The price of renting
equipment for windsurfing is $5 an hour and for snorkeling is $5 an hour. The table shows the total utility Max gets from windsurfing.
Total utility
per day from windsurfing from snorkeling
Hours
Total utility
How many hours does Max spend windsurfing and how many hours does he spend snorkeling?
1
120
40
.....
2
220
76
Max considers windsurfing for 3 hours and snorkeling for 1 hour. He
this combination because
3
300
106
4
360
128
O A. does not choose;
it does not use all of his income and the marginal utility per dollar from windsurfing is greater than the marginal utility per dollar
from snorkeling
396
140
412
150
7
422
158
O B. does not choose;
it does not use all of his income and the marginal utility per dollar from snorkeling is greater than the marginal utility per dollar from
windsurfing
OC. chooses;
this is the combination he chooses regardless of price or his income
O D. chooses;
it maximizes his total utility
To maximize his total utility, the number of hours that Max spends windsurfing is
and the number of hours he spends snorkeling is
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