QUESTION 4 Jackson has $26, which he plans to allocate among three rides at the
ID: 1132657 • Letter: Q
Question
QUESTION 4 Jackson has $26, which he plans to allocate among three rides at the amusement park. Each ride on the Roller Coaster costs $3.00, on the Bumper Cars, $2.00, and on Splatter Mountain, $1.00. The Table below shows Jackson's utility schedule for the three rides. Given Jackson's budget constraint, what is the maximum utility he can receive from amusement park rides? # OF | MARGINAL UTILITY MARGINAL UTILITY | MARGINAL UTILITY OM BUMPER FROM SPLATTER FROM ROLLER COASTER CARS MOUNTAIN 150 240 150 50 30 20 10 200 100 60 2 300 utils 890 utils 1210 utils 550 utils We don't have enough information to answer this question.Explanation / Answer
Ans: 1210 utils
Explanation:
Jakson will maximize utility at the combination of goods where the ratio of Marginal utility to price of each good are equal. It is seen from the table that (MU / P) is equal to 10 when Jakcon purchases the following combination:
The total expenditure = ($2 * 4) + ($1 * 6) + ($3 * 4) = $26
Total utility = (200 + 100 + 60 + 20) + (240 + 150 + 50 + 30 + 20 + 10) + (150 + 90 + 60 + 30)
= 1210 utils
No. of rides MUBC MUBC/P MUSM MUSM/P MURC MURC/P 1 200 100 240 240 150 50 2 100 50 150 150 90 30 3 60 30 50 50 60 20 4 20 10 30 30 30 10 5 10 5 20 20 9 3 6 5 2.5 10 10 0 0