Pete, from a different question (Pete enjoys rock concerts and theopera. The tab

Question

Pete, from a different question (Pete enjoys rock concerts and theopera. The table shows the marginal utility he gets from eachactivity. Number per month
marginal untility from rock concerts
Marginal utility from operas
1
120
2--
2
100
160
3
80
120
4
60
80
5
40
40
6
20
0

Pete has $200 a month to spend on concerts. The priceof a rock concert ticket is $20, and the price of an opera ticketis $40), wins a prize and has more than enough money to satisfy hisdesires for rock concerts and opera. He decides that he wouldlike to buy a total of 7 tickets each month. How many rockconcerts and how many operas does he now attend? Number per month
marginal untility from rock concerts
Marginal utility from operas
1
120
2--
2
100
160
3
80
120
4
60
80
5
40
40
6
20
0

Explanation / Answer

He goes to 4 rock concerts and 3 operas. The first threeoperas give pete more utility than even his first rock concert (thethird opera is equal but the statement still stands). Thenthe next two rock concerts give him more utility than theopera. this is currently a total of 5 tickets but he also hasalready spent 200 dollars leaving just 40 left to spend. This meanshe will spend it on rock concerts because the combined utility hegets from the 3rd and 4th rock concert is greater than the utilityhe gets from the 4th opera. (i was a little confused if themoney constraint still held if it does not then the answer changesto 3 rock concerts and 4 operas).

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