Question: How does Max's demand for snorkelling equipment change when the price of windsurfing equipment falls? What is Max's cross elasticity of demand for snorkelling with respect to the price of windsurfing? Are windsurfing and snorkelling substitutes or complements for Max?
Problem: Max has $35 a day to spend on windsurfing and snorkelling and he can spend as much time as he likes doing them. The price of renting equipment for windsurfing is $10 an hour and for snorkelling is $5 an hour. The table shows the total utility Max gets from each activity.
Calculate Max's marginal utility from windsurfing at each number of hours per day. Does Max's marginal utility from windsurfing obey the principle of diminishing marginal utility?