Quantity of Hot Dogs per Week Quantity of Baseball Games per Week Refer to the a
ID: 1167929 • Letter: Q
Question
Quantity of Hot
Dogs per Week
Quantity of
Baseball Games
per Week
Refer to the above table and assume that each week this consumer buys only hot dogs and tickets to baseball games. The price of a hot dog is $2.00 and the price of a baseball game is $60.00. If the consumer's income is $190.00 per week, he will purchase a quantity of ________ hot dogs and ________ baseball games each week at a consumer optimum.
Quantity of Hot
Dogs per Week
Total UtilityQuantity of
Baseball Games
per Week
Total Utility 1 40 1 400 2 60 2 700 3 76 3 850 4 86 4 950 5 91 5 1000 6 93 6 1025Explanation / Answer
Quantity of Hot
Dogs per Week
Quantity of
Baseball Games
per Week
Budget constraint is:
190 = 2X + 30 Y Where X: Quantity of hot dog, Y: Quantity of baseball games
or,
95 = X + 15Y
Optimal combination satisfying above condition is (5, 6), that is, 5 hot dogs & 6 baseball tickets.
Total utility from this combination = 91 + 1025 = 1,116
Quantity of Hot
Dogs per Week
Total Utility Marginal UtilityQuantity of
Baseball Games
per Week
Total Utility Marginal Utility 1 40 1 400 2 60 20 2 700 300 3 76 16 3 850 150 4 86 10 4 950 100 5 91 5 5 1000 50 6 93 2 6 1025 25