Question

Jennifer enjoys bowling and miniature golf. The extent of her enjoyment is revealed by the following utility schedule:

Number of games Of Bowling	Total utility From games played	Number of games miniature Golf	Total utility from games played
1	20 units	1	10 units
2	38	2	18
3	54	3	25
4	64	4	31

a) Compute Jennifer’s marginal utility for each activity.

b) Assume that initially that the price for a bowling game is $2 and for a miniature golf game is $1 per game. Given a budget of $8, how many games of each should Jennifer play to maximize her total enjoyment from playing?

c) How many games of each should Jennifer play if the price of golf game remains $1 but the price of a game of bowling decreases to $1 per game?

d) Draw Jennifer's demand curve for bowling games.

3. From the following information on costs of production of the ABC corporation, calculate a) Total Fixed Cost (TFC), Total Variable Cost (TVC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Average Total Cost (ATC).

Quantity Produced        Total Cost

         0                         $ 120
         1                            135
         2                            149
         3                            162
         4                            174
         5                            188
         6                            204
         7                            224
         8                            247
         9                            275

Answer 1

a) Marginal utility
Games of Bowling	Total Ulitliy	Marginal Utility for each Games of Bowling	No of Games Miniature Golf	Total Utility for Games Played	Marginal Utiliy for each unity]
1	20	20	1	10	10
2	38	18	2	18	8
3	54	16	3	25	7
4	64	10	4	31	6

b) Maxmize her total enjoyment for playing in budget of $8

3 Games of Bowling he enjoyed 54 utility and from 2 Games of Miniature golf he enjoyed 18 utility hence total

maximum enjoyment he can avail in $8 budget by playing 3 games of bowling and 2 games of miniature golf

c) Jenifar can play 4 games of each if the price of bowling decrease to $1

she can play 4 games of bowling in $4

and 4 games of golf in $4 hence played total games of both 8 in maximum $8

3) Cost Production of ABC Corporation

Quantity Produced	Total Cost	Fixed Cost	Variable Cost	Avg Variable Cost	Avg Fixed Cost	Avg Total Cost
0	$120	$120	$0	$0.00	$0.00	$0.00
1	$135	$120	$15	$15.00	$120.00	$135
2	$149	$120	$29	$14.50	$60.00	$75
3	$162	$120	$42	$14.00	$40.00	$54
4	$174	$120	$54	$13.50	$30.00	$44
5	$188	$120	$68	$13.60	$24.00	$38
6	$204	$120	$84	$14.00	$20.00	$34
7	$224	$120	$104	$14.86	$17.14	$32
8	$247	$120	$127	$15.88	$15.00	$31
9	$275	$120	$155	$17.22	$13.33	$31