Jennifer enjoys bowling and miniature golf. The extent of her enjoyment is revea
ID: 2528651 • Letter: J
Question
Jennifer enjoys bowling and miniature golf. The extent of her enjoyment is revealed by the following utility schedule:
Number of games
Of Bowling
Total utility
From games played
Number of games
miniature Golf
Total utility from
games played
1
20 units
1
10 units
2
38
2
18
3
54
3
25
4
64
4
31
a) Compute Jennifer’s marginal utility for each activity.
b) Assume that initially that the price for a bowling game is $2 and for a miniature golf game is $1 per game. Given a budget of $8, how many games of each should Jennifer play to maximize her total enjoyment from playing?
c) How many games of each should Jennifer play if the price of golf game remains $1 but the price of a game of bowling decreases to $1 per game?
d) Draw Jennifer's demand curve for bowling games.
3. From the following information on costs of production of the ABC corporation, calculate a) Total Fixed Cost (TFC), Total Variable Cost (TVC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Average Total Cost (ATC).
Quantity Produced Total Cost
0 $ 120
1 135
2 149
3 162
4 174
5 188
6 204
7 224
8 247
9 275
Number of games
Of Bowling
Total utility
From games played
Number of games
miniature Golf
Total utility from
games played
1
20 units
1
10 units
2
38
2
18
3
54
3
25
4
64
4
31
Explanation / Answer
6
b) Maxmize her total enjoyment for playing in budget of $8
3 Games of Bowling he enjoyed 54 utility and from 2 Games of Miniature golf he enjoyed 18 utility hence total
maximum enjoyment he can avail in $8 budget by playing 3 games of bowling and 2 games of miniature golf
c) Jenifar can play 4 games of each if the price of bowling decrease to $1
she can play 4 games of bowling in $4
and 4 games of golf in $4 hence played total games of both 8 in maximum $8
3) Cost Production of ABC Corporation
a) Marginal utility Games of Bowling Total Ulitliy Marginal Utility for each Games of Bowling No of Games Miniature Golf Total Utility for Games Played Marginal Utiliy for each unity] 1 20 20 1 10 10 2 38 18 2 18 8 3 54 16 3 25 7 4 64 10 4 316
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