00:01
So let's go over how to do this question.
00:06
Marginal utility is equal to the difference between the willingness to pay at point n minus willingness to pay at point n minus one.
00:33
So for the points zero and one we can calculate our willingness to pay.
01:20
So at one our willingness to pay is 24.
01:22
At zero cds it's zero.
01:27
So therefore we can fill in zero for zero quantity and then at one marginal utility is 24 minus zero so it's 24 and then it would be the same for dvds it's just 42 because it's 42 minus zero.
01:49
Then at two we have 46 minus 24.
01:55
That will give us our marginal utility at two.
01:58
So 46 minus 24 gives you 22.
02:07
Then for the dvds we're going to do 78 minus 42 giving you 36.
02:15
Then for three 66 minus 46 gives you 20.
02:21
And then for the dvds we have 108 minus 78.
02:27
That's going to give you 30.
02:36
So then at four 84 minus 66 gives you 18.
02:47
And then at four we have 132 minus 108 giving you 24.
02:55
And then at five we have 100 minus 84.
03:00
That's 16.
03:02
Then for the dvds we have 150 minus 132 giving us 18.
03:15
And then the difference between six and five for cds is 14.
03:23
And then we have a difference of 12 for the dvds.
03:33
And then for seven for the cds we have 126 minus 114.
03:43
So that gives you 12.
03:47
And then for the dvds 168 minus 162 gives you six.
03:56
And then for eight we have a difference of 10.
04:01
And then for the dvds the difference becomes zero.
04:07
And then for nine we have 144 minus 136 giving us eight.
04:19
And then we have 150 minus 144 and that's six.
04:23
And for 11 there's a difference of four.
04:26
And for 12 the difference is two.
04:30
For 13 the difference becomes zero.
04:40
So after that the price of a cd is $10.
04:52
The price of a dvd is $30.
05:02
How many cds should she purchase or cds and dvds should she purchase if her budget is fixed at $150? so at the optimal bundle marginal utility over price for both goods are equal.
05:52
So we can see that when the price of the cd is $10 and then we have seven cds and the marginal utility is $12.
06:10
We're going to put the marginal utility of the cds over the price of the cds.
06:20
And then we're going to find the amount of dvds that will be equal to this fraction.
06:44
So then if we look at the quantity of two dvds marginal utility is 36...