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If, at your current consumption levels, your marginal utility for baseball tickets is higher than your...

If, at your current consumption levels, your marginal utility for baseball tickets is higher than your marginal utility for football tickets, then you should go to more baseball games and less football games. True or false? Explain.

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Answer #1

Here we cannot solely consider whether to go for more basketball or more football games on the basis of marginal utility alone, as we also need to consider price of each ticket for making a wise decision.

Let us define Marginal Utility of Money from Basketball (MUM-B) as

and let us define Marginal Utility of Money from Football (MUM-F) as

Now, if MUM-B > MUM-F, then we should go for more Basketball games

and if MUM-B < MUM-F, then we should go for more Football games.

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