Suppose That Melissa Spends Recreation Time and Money on Two

question 86

Essay

Suppose that Melissa spends recreation time and money on two leisure activities: Tennis and fishing.The cost per hour of tennis (court fees)and per hour of fishing (boat rentals)is $4.The table below shows the total utility that Melissa derives from the two activities.
a)Complete the columns of marginal utilities.
b)Assume that Melissa has a budget of $20.To maximize her total utility,how much would she allocate her spending between the two activities? What is the resulting total utility?
c)At the end of the day,Melissa digs deep in her pocket and discovers an extra $4.If she allocates this additional spending between the two activities so as to maximize her total utility,what will be the final totals?
d)Suppose that Melissa's utility from the two activities remains unchanged the next day,when she arrives with $20 in her pocket.To her pleasure,she discovers that the hourly charge on court fees has decrease to $3.How will she allocate her expenditures in order to maximize her total utility?

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Definitions:

Conscious Perception

Conscious perception is the awareness of one's environment and internal states and processes, including thoughts and feelings, in the present moment.

Experience

The knowledge or skill acquired through involvement in or exposure to events, situations, or activities over time.

Scripts

Cognitive structures that contain knowledge about the sequence of events and behaviors that are appropriate in specific situations.

Stage of Life

Phases through which an individual passes during their lifetime, each with specific and unique challenges and milestones.