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Max has $35 a day to spend on windsurfing and snorkeling and he can spend as much time as he likes doing them
Max has $35 a day to spend on windsurfing and snorkeling and he can spend as much time as he likes doing them. The price of renting equipment for windsurfing is $10 an hour and for snorkeling is $5 an hour. The table shows the total utility Max gets from each activity. Total utility Hours per I day 1 2 3 4 5 6 7 Total utility from windsurfing 120 220 300 360 396 412 422 from snorkeling 40 76 106 128 140 150 158 10. Calculate Max's marginal utility from windsurfing at each number of hours per day. Does Max's marginal utility from windsurfing obey the principle of diminishing marginal utility? 11. Calculate Max's marginal utility from snorkeling at each number of hours per day. Does Max's marginal utility from snorkeling obey the principle of diminishing marginal utility?
Expert Solution
10)
| Hours per day | Total utility from windsurfing | Marginal utility from windsurfing |
| 1 | 120 | 120 |
| 2 | 220 | 100 |
| 3 | 300 | 80 |
| 4 | 360 | 60 |
| 5 | 396 | 36 |
| 6 | 412 | 16 |
| 7 | 422 | 10 |
As marginal utility is declining as hours per day rises, there occurs diminishing marginal utility from windsurfing.
11)
| Hours per day | Total utility from snorkeling | Marginal utility from snorkeling |
| 1 | 40 | 40 |
| 2 | 76 | 36 |
| 3 | 106 | 30 |
| 4 | 128 | 22 |
| 5 | 140 | 12 |
| 6 | 150 | 10 |
| 7 | 158 | 8 |
As marginal utility is declining as hours per day rises, there occurs diminishing marginal utility from snorkeling.
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