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Quantity
Marginal Utility
Marginal Utility Per $
50
1
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2
3
4
Movies
Quantity
Marginal Utility
Marginal Utility Per $
1
2
3
4
Using the equation created above, solve to locate four points and plot them on a budget constraint line. Create the graph in Excel and paste onto your Word document answering the questions below. Review the tutorial on creating graphs in Week 01 if you run into any problems.
1.How many books and movies would maximize your level of satisfaction give
n the budget of $60.00?
2.Are the charts above consistent with the Law of Diminishing Marginal Utility? Why or Why not?
3.What is the consumer surplus of purchasing three books?
4.If you were able to go to the matinee for movies at a price of $10.00 instead, how would this change the amount of books and movies you could purchase?