Janet spends her entertainment budget on movies and basketball games. movie tickets cost $10 each and basketball game tickets cost $15 each. if janet saw one more movie (holding the number of basketball games constant), her total utility would increase by 28. on the other hand, if she attended one more basketball game (holding the number of movies constant), her utility would increase by 55. from this information we can conclude that janet : a. should attend fewer basketball games and see more movies. b. is attending the optimal combination of movies and basketball games. c. should see fewer movies and attend more basketball games. d. should see more movies and attend more basketball games.

Suppose you win a small lottery and have the choice of two ways to be paid: you can accept the money in a lump sum or in a series of payments over time. if you pick the lump sum, you get $2,950 today. if you pick payments over time, you get three payments: $1,000 today, $1,000 1 year from today, and $1,000 2 years from today. 1) at an interest rate of 6% per year, the winner would be better off accepting the (lump sum / payments over time), since it has the greater present value. 2) at an interest rate of 9% per year, the winner would be better off accepting the (lump sum / payments over time), since it has the greater present value. 3) years after you win the lottery, a friend in another country calls to ask your advice. by wild coincidence, she has just won another lottery with the same payout schemes. she must make a quick decision about whether to collect her money under the lump sum or the payments over time. what is the best advice to give your friend? a) the lump sum is always better. b) the payments over time are always better. c) it will depend on the interest rate; advise her to get a calculator. d) none of these answers is good advice.