Question

please show step by step and what equation to use to get the correct answer.

Table 1 Cindy enjoys golf and tennis. Table 1 shows the marginal utility she gets from each activity Hours per month Marginal utility Marginal utility from golf from tennis Cindy has $70 a month to spend, and she can spend as much time as she likes on her leisure pursuits. The price of an hour of golf is $10, and the price of an hour of tennis is $5. Table 2 shows some combinations of golf and tennis that Cindy can afford Calculate Cindy's marginal utility per dollar from golf and tennis and fill in the columns in the table >>> Answer to 1 decimal place Table 2 Golf ($10 per hour) Marginal utility Hours per dollar Tennis (55 per hour Marginal utility Hours per dollar

Answer 1

Ans:

Golf ($10 per hour)		Tennis ($5 per hour)
Hours	Marginal utility per dollar	Hours	Marginal utility per dollar
6	1	2	7.2
5	2	4	2
4	3	6	0.4

Utility maximization combination is 5 hours of Golf and 4 hours of Tennis.

Explanation:

Marginal utility per dollar for Golf = MU_G / P_G  

Marginal utility per dollar for Tennis = MU_T / P_T  

Utility maximization condition is where ;

• MU_G / P_G = MU_T / P_T  
• Entire given money income ( $70 ) must be spent on both the goods or services

Utility maximizing equation;

Y = (P_G * Q_G ) + ( P_T * Q_T )

$70 = ( $10 * 5 ) + ( $5 * 4)