Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing (y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours. Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activi- ties. He currently exhausts this entire budget by watching two movies and visiting the climbing gym fifteen times. With this monthly budget, he would also have been able to afford exactly seven movies and six visits to the climbing gym. Assume that both goods are perfectly divisible. (a) Write down Ronald's money and time constraints as algebraic inequalities. (b) Show, using algebra, that Ronald's two budget lines intersect at the bundle (x, y) (5.5, 8.7). = (c) Plot Ronald's money constraint using a red dotted line. Plot Ronald's time constraint using a blue dotted line. Clearly label each constraint, any axis intercepts, and any points of intersection between the two constraints. Shade in Ronald's budget set, using solid black lines to indicate where the boundaries of the budget set are.

Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing (y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours. Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activi- ties. He currently exhausts this entire budget by watching two movies and visiting the climbing gym fifteen times. With this monthly budget, he would also have been able to afford exactly seven movies and six visits to the climbing gym. Assume that both goods are perfectly divisible. (a) Write down Ronald's money and time constraints as algebraic inequalities. (b) Show, using algebra, that Ronald's two budget lines intersect at the bundle (x, y) (5.5, 8.7). = (c) Plot Ronald's money constraint using a red dotted line. Plot Ronald's time constraint using a blue dotted line. Clearly label each constraint, any axis intercepts, and any points of intersection between the two constraints. Shade in Ronald's budget set, using solid black lines to indicate where the boundaries of the budget set are.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 6P

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Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing (y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours. Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activi- ties. He currently exhausts this entire budget by watching two movies and visiting the climbing gym fifteen times. With this monthly budget, he would also have been able to afford exactly seven movies and six visits to the climbing gym. Assume that both goods are perfectly divisible. (a) Write down Ronald's money and time constraints as algebraic inequalities. (b) Show, using algebra, that Ronald's two budget lines intersect at the bundle (x, y) (5.5, 8.7). = (c) Plot Ronald's money constraint using a red dotted line. Plot Ronald's time constraint using a blue dotted line. Clearly label each constraint, any axis…
Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doingone of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing(y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours.Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activities. He currently exhausts this entire budget by watching two movies and visiting the climbinggym fifteen times. With this monthly budget, he would also have been able to afford exactlyseven movies and six visits to the climbing gym.Assume that both goods are perfectly divisible.(b) Show, using algebra, that Ronald’s two budget lines intersect at the bundle (x, y) =(5.5, 8.7).
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John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. Does John show diminishing marginal utility for Coke or does he show increasing marginal utility for Coke? Suppose that John has $3 in his pocket. If Cokes cost $1 each and John is willing to spend one of his dollars on purchasing a first can of Coke, would he spend his second dollar on a Coke, too? What about the third dollar? If John’s marginal utility for Coke keeps on increasing no matter how many Cokes he drinks, would it be fair to say that he is addicted to Coke? *use tables and/or graphs if possible, please original work
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