Trips

Total

Utility

Marginal Utility (per

trip)

Phone

Minutes

Total

Utility

Marginal Utility (per

minute)

2

3

4

5

150

210

260

300

70

60

50

40

120

80

40

0

900

680

380

0

140/40 = 3.5

220/40 = 5.5

300/40 = 7.5

380/40 = 9.5

Note that we cannot directly compare marginal utilities, since the units are trips versus phone minutes.

We need a common denominator for comparison, which is price. Dividing MU by the price, yields columns

4 and 8 in the table below.

Round
Trips

Total
Utility

Marginal Utility
(per trip)

MU/P

Phone
Minutes

Total
Utility

Marginal utility (per
minute)

MU/P

0

-

-

200

1100

60/40 = 1.5

80

80

150

70

210

60

260

50

300

40

80/$2

= 40

70/$2

= 35

60/$2

= 30

50/$2

= 25

40/$2

= 20

80

40

0

160

1040

140/40 = 3.5

120

900

220/40 = 5.5

680

300/40 =7.5

380

380/40 = 9.5

0

-

-

1.5/$0.05

= 30

3.5/$0.05

= 70

5.5/$0.05

= 110

7.5/$0.05

= 150

9.5/$0.05

= 190

0

1

2

3

4

5
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