A college student, Ramón Juárez, often purchases candy bars or bags of potato chips between classes; he tries to limit his spending on these snacks to $8 per week A bag of chips costs $0.75 and a candy bar costs $0.50 from the vending machines on campus He has been purchasing an average of bags of chips and candy bars each week Mr Juárez is a careful maximizer of utility, and he estimates that the marginal utility of an additional bag of chips during a week is In your answers use B to denote candy bars and C to denote potato chips How much is he spending on snacks? How does this amount compare to his budget constraint? What is the marginal utility of an additional candy bar during the week? Case in Point: Changing Lanes and Raising Utility In preparation for sitting in the slow, crowded lanes for single-occupancyvehicles, T J Zane used to stop at his favorite coffee kiosk to buy a $2 cup of coffee as he headed off to work on Interstate 15 in the San Diego area Since 1996, an experiment in road pricing has caused him and others to change their ways—and to raise their total utility Before 1996, only car-poolers could use the specially marked highoccupancy-vehicles lanes With those lanes nearly empty, traffic authorities decided to allow drivers of single-occupancy-vehicles to use those lanes, so long as they paid a price Now, electronic signs tell drivers how much it will cost them to drive on the special lanes The price is recalculated every minutes depending on the traffic On one morning during rush hour, it varied from $1.25 at 7:10 a.m., to $1.50 at 7:16 a.m., to Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 363