Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor

Chapter 6, Problem 1

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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 Table 6.11, figure out the points on Jeremys 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 6 330 120 900 7 200 140 980 8 180 160 1040 9 160 180 1080 10 140 200 1100 Table 6.11