Bob Budgets $12 a Week for Entertainment

question 53

Multiple Choice

Bob budgets $12 a week for entertainment. He splits his time between going to the movies and going to the gym. Each movie costs $3 and each session at the gym also costs $3. The total utility from each of these activities is shown in the table below. Bob's utility maximizing point is:

• A) 3 movies; 3 gym workout sessions
• B) 4 movies; 0 gym workout sessions
• C) 4 movies; 2 gym workout sessions
• D) 1 movie; 5 gym workout sessions

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Definitions:

Positive Relationship

A correlation where two variables move in the same direction, meaning that as one variable increases, the other also increases.

Pablo Picasso

A Spanish painter, sculptor, printmaker, and influential artist of the 20th century, known for co-founding the Cubist movement.

Derived Demand

The demand for a resource that depends on the demand for the products it helps to produce.

Stock Options

Financial derivatives that grant the holder the right, but not the obligation, to buy or sell a stock at a specified price within a certain time frame.