UTILITY MAXIMIZATION The following tables illustrate Eileen's utilities from watching first-run movies in a theater and from renting movies from a video store. Suppose that she has a monthly movie budget of $36, each movie ticket costs $6, and each video rental costs $3. Movies in a Theater 11eb72e0_401d_3a7b_a6ba_09adb4eda3e2_SM2333_00 Movies from a Video Store 11eb72e0_401d_3a7c_a6ba_f9451bac3084_SM2333_00 a. Complete the tables. b. Do these tables show that Eileen's preferences obey the law of diminishing marginal utility? Explain your answer. c. How much of each good does Eileen consume in equilibrium? d. Suppose the prices of both types of movies drop to $1 while Eileen's movie budget shrinks to $10. How much of each good does she consume in equilibrium?

Economics 10th Edition by William McEachern

النسخة 10الرقم المعياري الدولي: 978-1133188124

Economics 10th Edition by William McEachern

النسخة 10الرقم المعياري الدولي: 978-1133188124

تمرين 5

UTILITY MAXIMIZATION The following tables illustrate Eileen's utilities from watching first-run movies in a theater and from renting movies from a video store. Suppose that she has a monthly movie budget of $36, each movie ticket costs $6, and each video rental costs $3.
Movies in a Theater

Movies from a Video Store

a. Complete the tables.
b. Do these tables show that Eileen's preferences obey the law of diminishing marginal utility? Explain your answer.
c. How much of each good does Eileen consume in equilibrium?
d. Suppose the prices of both types of movies drop to $1 while Eileen's movie budget shrinks to $10. How much of each good does she consume in equilibrium?

التوضيح

موثّق

a. Utility Table: Movies in Theatre
Uti...