Question

18a

17. Cindy has $70 a month to spend, and she can spend as much time as she likes playing golf and tennis. The price of an hour of golf is $10, and the price of an hour of tennis is $5. The table shows Cindy's marginal utility from each sport. Hours per month Marginal utility from golf Marginal utility from tennis 40 80 Make a table that shows Cindy's affordable combi- nations of hours playing golf and tennis. If Cindy increases her expenditure to $100, describe how her consumption possibilities change. Utility-Maximizing Choice Use the information in Problem 17 to work Problems 18 to 24. 18. a. How many hours of golf and how many hours of tennis does Cindy play to maximize her utility?

Answer 1

hours	Mu of Golf	MU of Tennis	MU of Golf / PRICE	MU of Tennis / PRICE		golf price	10
1	80	40	8	8		Tennis price	5
2	60	36	6	7.2
3	40	30	4	6
4	30	10	3	2
5	20	5	2	1
6	10	2	1	0.4
7	6	1	0.6	0.2
	equilibrium condition
	MU of Golf/ P = MU of Tennis/ P
	income = hour price of golf *no of hours for golf +hour price of Tennis* no of Hours for tennis
	10*5+5*4
	70
	income should be spend in such way that it should give maximum satisfaction to consumer and should be spend fully
	so we can notice than Mug/P= Mut/ P is equal on different combination like
	8,8
	6,6
	2,2
	but only 2,2 in which tennis hours are 4 and golf hours are 5 to be consumed that exhaust consumer income in fully.