Answer to Question #155959 in Microeconomics for Amina Abdi Guure

Question

Jerry has $12 a week to spend on yogurt and maga￾zines. The price of yogurt is $2, and the price of a

magazine is $4. 

1. List the combinations of yogurt and magazines

that Jerry can afford. Draw a graph of Jerry’s

budget line with the quantity of magazines plotted

on the x-axis.

2. Describe how Jerry’s consumption possibilities

change if, other things remaining the same, (i) the

price of a magazine falls and (ii) Jerry’s income

increases.

Use the following data to work Problems 3 to 9.

Max enjoys windsurfing and snorkeling. Max has $35 a

day to spend, and he can spend as much time as he

likes on his leisure pursuits. The price of renting equip￾ment for windsurfing is $10 an hour and for snorkeling

is $5 an hour. The table shows the total utility Max gets

from each activity.

Total Total

Hours utility from utility from

per day windsurfing snorkeling

1 120 40

2 220 76

3 300 106

4 360 128

5 396 140

6 412 150

7 422 158

3. Calculate Max’s marginal utility from windsurf￾ing at each number of hours per day. Does Max’s

marginal utility from windsurfing obey the prin￾ciple of diminishing marginal utility?

4. Calculate Max’s marginal utility from snorkeling

at each number of hours per day. Does Max’s

marginal utility from snorkeling obey the princi￾ple of diminishing marginal utility?

5. Which does Max enjoy more: his 6th hour of

windsurfing or his 6th hour of snorkeling?

Utility-Maximizing Choice (Study Plan 8.2)

6. Make a table that shows the various combinations

of hours spent windsurfing and snorkeling that

Answer 1

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