Madison enjoys ice skating and biking. The table below shows the total utility (TU) she gets
from each activity. (11 points total)
Hours per day
TU from ice
MU from ice
TU from biking
MU from
skating
skating
biking
300
65
2
550
125
750
180
4
900
230
U
1000
275
6
1050
315
a. Fill in the marginal utility (MU) from each additional hour of ice skating and biking on
the table above. Does the marginal utility for each activity make sense? Why or why not?
(4 points)
b. Suppose Madison has a $70 budget and unlimited leisure time. Ice skating costs $10/hour
and a bike rental is $5/hour. In order to maximize her total utility, how much time does
Madison spend on ice skating and biking? Show your work. (nt: Think about how
much it costs to buy additional utility.) (7 points)
