Lori plans to buy a convertible this weekend. Her two favorite cars are the BMW, which would give her 160,000 utils of satisfaction, and the Mitsubishi Eclipse Spyder, which would give her only 124,000 utils of satisfaction. The BMW that she wants sells for $37,220, while the Mitsubishi sells for $28,200. She can afford either car.
a.
Which car will she buy in order to maximize her utility?
b.
To what price will her second choice have to fall to get her to make her first choice?

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The Answer of Lori plans to buy a convertible this weekend. Her two favorite cars are the BMW, which would give her 160,000 utils of satisfaction, and the Mitsubishi Eclipse Spyder, which would give her only 124,000 utils of satisfaction. The BMW that she wants sells for $37,220, while the Mitsubishi sells for $28,200. She can afford either car.
a.
Which car will she buy in order to maximize her utility?
b.
To what price will her second choice have to fall to get her to make her first choice?

Lori Plans to Buy a Convertible This Weekend