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# Question: More Exercises on Consumption and Utility-Maximizing Choice 1. Joy goes bowling once and ice skating twice a month when

Question: More Exercises on Consumption and Utility-Maximizing Choice 1. Joy goes bowling once and ice skating twice a month when he has \$20 to spend on these activities. A visit to the bowling alley costs \$10, and an ice-skating ticket costs \$5. Draw Joy’s budget line. If the price of an ice-skating ticket falls to \$4, describe how Joy’s consumption possibilitiesSee the answerSee the answerSee the answer done loading
Show transcribed image textTranscribed image text: More Exercises on Consumption and Utility-Maximizing Choice 1. Joy goes bowling once and ice skating twice a month when he has \$20 to spend on these activities. A visit to the bowling alley costs \$10, and an ice-skating ticket costs \$5. Draw Joy’s budget line. If the price of an ice-skating ticket falls to \$4, describe how Joy’s consumption possibilities change. 2. 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 tennis Marginal Utility from golf 80 1 40 2 60 3 40 36 30 10 4 30 20 5 5 6 10 2 7 0 1 a. Make a table that shows Cindy’s affordable combinations of hours playing golf and tennis. b. If Cindy increases her expenditure to \$100, describe how her consumption possibilities change. c. How many hours of golf and how many hours of tennis does she play to maximize her utility? 3. Cindy’s tennis club raises its price of an hour of tennis from \$5 to \$10, other things remaining the same. a. List the combinations of hours spent playing golf and tennis that Cindy can now afford and her marginal utility per dollar from golf and from tennis. b. How many hours does Cindy now spend playing golf and how many hours does she spend playing tennis?

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