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Mrs Grey likes swimming and playing badminton as part of her exercise routine. She has a budget of up
to $25 to spend each week on getting fit. Each trip to the swimming pool costs $3, and each badminton
session costs $4.
Her marginal utility schedule is given below:
Number of trips Marginal utility of swimming
1 -90
2 -80
3- 70
4 -60
5- 50
Marginal utility of badminton
1 – 100
2 – 90
3 – 80
4 – 70
5 – 60
Which combination of activities gives Mrs Grey the highest utility?
Swimming /Badminton
A. 1 / 5
B. 3 / 4
C. 4 / 3
D. 2. /. 4Work out total utilities for each activity (=cumulative marginal)
Swimming Badminton
1 90 100
2 170 190
3 240 270
4 300 340
5 350 400Then work out the total for each of the presented options
A = 90 + 400 = 490
B = 240 + 340 = 580
C = 300 + 270 = 570
D = 170 + 340 = 510So, looks like B
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