Suppose Isaac's marginal utility from attending his 10th San Antonio Spurs game was 50 and the marginal utility from attending his 1st Rihanna concert was 200. Assume that the price of a Spurs ticket is $30 and the price of a Rihanna ticket is $100. Which of the following would be TRUE?
A) Isaac would attend more Rihanna concerts and less Spurs games.
B) Isaac would attend more Spurs games and less Rihanna concerts.
C) Isaac would not alter his behavior.
D) Isaac would attend less of both Spurs games and Rihanna concerts.

Question

Quizplus · Accepted Answer

Isaac's marginal utility per dollar spent on Spurs games is 1.67 (50/30), while the marginal utility per dollar spent on Rihanna concert is 2 (200/100). This means that Isaac gets more satisfaction per dollar spent on Rihanna concerts than on Spurs games. However, since Rihanna tickets are more expensive, attending more Rihanna concerts would require Isaac to spend more money, which might not be feasible for him. Therefore, Isaac would try to maximize his overall utility by attending more Spurs games and fewer Rihanna concerts, as he would get more satisfaction per dollar spent on Spurs games.

Suppose Isaac's Marginal Utility from Attending His 10th San Antonio