Margo\'s marginal utility of one dance lesson is 100 utils per lesson. Her margi
ID: 1211796 • Letter: M
Question
Margo's marginal utility of one dance lesson is 100 utils per lesson. Her marginal utility of a new pair of dance shoes is 300 utils per pair. The price of a dance lesson is $50 per lesson. She currently spends all her income, and she buys her optimal consumption bundle. What is the price of a pair of dance shoes? 10. Daouda 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 $10 an hour and for snorkeling is $5 an hour. Table 1 shows the total utility Daouda gets from each activity: a. Fill in the boxes in Table 1 for Daouda's marguial utility from windsurfing at each number of hours per day. Does Daouda's marguial utility from windsurfing obey the principle of diminishing marginal utility? b. Fill in the boxes in Table 1 for Daouda's marginal utility from snorkeling at each number of hours per day. Does Daouda's marginal utility from snorkeling obey the principle of diminishing marginal utility? c. Which does Daouda enjoy more: his 6th hour of windsurfing or his 6th hour of snorkeling? d. Fill in Table 2 with the combinations of hours spent windsurfing and snorkeling that Daouda can afford. Show your work. e. Fill in Table 3, getting bundles from Table 2 and marginal utilities from Table 1. f.i. To maximize his utility, how many hours a day does Daouda spend on each activity? Use Table 3 to explain. ii. If Daouda spent a dollar more on windsurfing and a dollar less on than in part. how would his total utility change? iii. If Daouda spent a dollar less on windsurfing and a dollar more on snorkeling than in part f.i, how would his total utility change?Explanation / Answer
workers total utility marginal utility total utility marginal uti 1 120 0 40 0 2 220 100 76 36 3 300 80 106 30 4 360 60 128 22 5 396 36 140 12 6 412 16 150 10 7 422 10 150 0