Max has $35 a day to spend, and he can spend as much time as he likes on his leisure pursuits. Windsurfing equipment rents for $10 an hour, and snorkeling equipment rents for $5 an hour. If Max equalizes the marginal utility per hour from windsurfing and from snorkeling, which of the following situations arises?

Question

Max has $35 a day to spend, and he can spend as much time as he likes on his leisure pursuits. Windsurfing equipment rents for $10 an hour, and snorkeling equipment rents for $5 an hour. If Max equalizes the marginal utility  per hour  from windsurfing and from snorkeling, which of the following situations arises?

Answer

Max can increase his total utility by spending less time windsurfing and more time snorkeling.

Answer

Max maximizes his total utility.

Answer

Max maximizes his marginal utility per dollar on these activities.

Answer

Max can increase his total utility by spending more time windsurfing and less time snorkeling.

Answer

Max can increase his total utility only if the price of windsurfing equipment rentals decreases.

Crowdly

Max has $35 a day to spend, and he can spend as much time as he likes on his lei...

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