Sam Has $200 a Month to Spend on Either Tanning

question 48

Multiple Choice

Sam has $200 a month to spend on either tanning sessions or rounds of golf.Tanning sessions are $20 each,and a round of golf is $40.What can we say about Sam's utility?

• A) Sam will get more utility from each round of golf than each tanning session.
• B) Sam will get the same utility from one round of golf as he would from two tanning sessions.
• C) Sam will maximize his utility from 2 rounds of golf and 6 tanning sessions.
• D) We cannot say anything about Sam's utility from the consumption of these goods without more information.

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Definitions:

Purchasing Power

The ability of an individual or group to buy goods or services, often tied to income levels and inflation.

Appreciation

An increase in the value of one currency relative to another currency.

Nanotechnology

The science and technology of creating and utilizing materials, devices, and systems by manipulating matter at the nanometer scale.

Economic Growth

An increase in the production of goods and services in an economy over a period, often measured as the percent rate increase in real gross domestic product (GDP).