Question

An optimizing consumer currently spends money on many goods. The last ticket to a baseball game she bought cost $15 and gave her 10 utils of satisfaction. If this same consumer spends $10 on a movie ticket and is still optimizing utility, how many utils will she receive from the purchase

Answer 1

Answer:

Number of utils that will be received from the purchase is 6.667 utils.

Explanation:

At Optimum:

Pa / Pb = MUa / MUb

Where;

Pa = Price of the baseball game = 15

Pb = Price of the movie ticket = 10

Now,

15/10 = 10/MUb

1.5 = 10/MUb

MUb = 6.667 utils

Thus, the number of utils that will be received from the purchase is 6.667 utils.