..Suppose you have $30 to spend on either bowling or billiards.A game ofbilliards costs you $4, and bowling costs $2 per game.Using the informationin Exhibit 67, determine the utilitymaximizing combination of bowling andbilliards.
A)four billiards games, four games of bowling
B)five billiards games, two games of bowling
C)three billiards games, eight games of bowling
D)five billiards games, five games of bowling
E)twelve games of bowling

Question

..Suppose you have $30 to spend on either bowling or billiards.A game ofbilliards costs you $4, and bowling costs $2 per game.Using the informationin Exhibit 6­7, determine the utility­maximizing combination of bowling andbilliards.
A)four billiards games, four games of bowling 
B)five billiards games, two games of bowling 
C)three billiards games, eight games of bowling 
D)five billiards games, five games of bowling 
E)twelve games of bowling

Quizplus · Accepted Answer

We can create a table to compare the marginal utility per dollar of each option:

| Option         | Cost | Total Utility | Marginal Utility | Marginal Utility per Dollar |
|----------------|------|---------------|-----------------|-----------------------------|
| 4 billiards     | $16  | 48            | 12              | 0.75                        |
| 5 billiards     | $20  | 56            | 8               | 0.40                        |
| 6 billiards     | $24  | 60            | 4               | 0.17                        |
| 7 billiards     | $28  | 61            | 1               | 0.04                        |
| 8 billiards     | $32  | 60            | -1              | -0.03                       |
| 2 bowling       | $4   | 20            | 10              | 2.50                        |
| 4 bowling       | $8   | 32            | 12              | 1.50                        |
| 6 bowling       | $12  | 42            | 10              | 0.83                        |
| 8 bowling       | $16  | 48            | 6               | 0.38                        |
| 10 bowling      | $20  | 52            | 4               | 0.20                        |
| 12 bowling      | $24  | 54            | 2               | 0.08                        |
| 14 bowling      | $28  | 54            | 0               | 0.00                        |
| 16 bowling      | $32  | 52            | -2              | -0.06                       |

Based on this table, the option with the highest marginal utility per dollar is five billiards games and five games of bowling. Therefore, the best choice is D.

Suppose You Have $30 to Spend on Either Bowling or Billiards.A