Refer to the table below. If the subscription price for a sports app is $2 per week, the subscription price of a game app is $1 per week, and a student has $9 per week to spend, what quantities will she purchase at a consumer optimum?Quantity of Sports Apps per weekMarginal Utility (utils)Quantity of Game Apps per WeekMarginal Utility (utils)11,20011,70021,00021,400380031,100460048005400550061006200

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Asked Dec 3, 2019
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Refer to the table below. If the subscription price for a sports app is $2 per week, the subscription price of a game app is $1 per week, and a student has $9 per week to spend, what quantities will she purchase at a consumer optimum?

Quantity of Sports Apps per week

Marginal Utility (utils)

Quantity of Game Apps per Week

Marginal Utility (utils)

1

1,200

1

1,700

2

1,000

2

1,400

3

800

3

1,100

4

600

4

800

5

400

5

500

6

100

6

200

 

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Expert Answer

Step 1

Given,

The subscription price for a sports app Ps is $2 per week.

The subscription price for a game app Pg is $1 per week.

A student has $9 per week to spend.

Quantity Price of Marginal Quantity Price of Marginal
of sports sports
Apps per Apps per
week
of game game
Apps per Apps per
week
1
utility
utility
week
$2
week
1
1200
1000
$1
1700
2
$2
2
$1
1400
$2
800
$1
1100
$2
4
600
4
$1
800
5
$2
400
5
500
$2
100
$1
200
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Quantity Price of Marginal Quantity Price of Marginal of sports sports Apps per Apps per week of game game Apps per Apps per week 1 utility utility week $2 week 1 1200 1000 $1 1700 2 $2 2 $1 1400 $2 800 $1 1100 $2 4 600 4 $1 800 5 $2 400 5 500 $2 100 $1 200

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Step 2

The budget constraint of student is:

м
РО
$9 $2Q $1Qs
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м РО $9 $2Q $1Qs

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Step 3

Here, M is the income of student per week and QS and QG are the quantity of sports Apps and game Apps respectively.

Since ut...

Marginal M PQs +PQG
utility
Quantity Price of Marginal Quantity Price
utility
of sports sports
Apps per Apps
week
of game of
Apps per game
week
$9= $2Qs +$10
Аpps
per
week
per
week
$1
M $16 $9
M= S9
5
$2
400
1000
200
6
$2
5
2
500
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Marginal M PQs +PQG utility Quantity Price of Marginal Quantity Price utility of sports sports Apps per Apps week of game of Apps per game week $9= $2Qs +$10 Аpps per week per week $1 M $16 $9 M= S9 5 $2 400 1000 200 6 $2 5 2 500

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