Identify utility-maximizing point

Reference no: EM133094422

Question: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasoline money.

He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes.

Using the values given in the table below, figure out the points on Jeremy's consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.

Round Trips	Total Utility	Phone Minutes	Total Utility
0	0	0	0
1	80	20	200
2	150	40	380
3	210	60	540
4	260	80	680
5	300	100	800 900
6	330	120	800 900
7	200	140	980
8	180	160	1040
9	160	180	1080
10	140	200	1100

Reference no: EM133094422

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