What is “W”?
A. 0B. 20C. 40
What is “W”?
What is “X”?
What is “Y”?
What is “Z”?
A. 0B. 5C. 20D. 40E. None of the above
Buy (A) 1 apple/ 2 oranges (B) 3 apples/ 1 orange (C) 5 apples
The Utility Maximizing Combination of Apples and Oranges Obtainable with an Income of $
5
(2)
Apple (Product A):
Price = $1
(3)
Oranges (Product B):
Price = $2
(1)
Unit of Product
(a)
Marginal Utility,
Utils
(b)
Marginal Utility
per dollar
(MU/Price)
(a)
Marginal Utility,
Utils
(b)
Marginal Utility
per dollar
(MU/Price)
First
10
10
24
12
Second
8
8
20
10
Third
7
7
18
9
Fourth
6
6
16
8
Fifth
5
5
12
6
Sixth
4
4
6
3
Seventh
3
3
4
2
Answer
The Utility Maximizing Combination of Apples and Oranges Obtainable with an Income of $5
(2)
Apple (Product A):
Price = $1
(3)
Oranges (Product B):
Price = $2
(1)
Unit of Product
(a)
Marginal Utility,
Utils
(b)
Marginal Utility
per dollar
(MU/Price)
(a)
Marginal Utility,
Utils
(b)
Marginal Utility
per dollar
(MU/Price)
First
10
10
24
12
Second
8
8
20
10
Third
7
7
18
9
Fourth
6
6
16
8
Fifth
5
5
12
6
Sixth
4
4
6
3
Seventh
3
3
4
2
Fiona wants to sell a local advertising calendar. She knows there are 1000 households in her community, and estimates 30 percent households will buy 1 calendar each. The printing company will charge a $100 set up fee and calendars will cost $4.00 each to print. What minimum price will she need to charge to cover all costs and make a $500 profit?
John's Manufacturing makes recliners. They plan to sell all styles of their recliners at a price of $190.00. They estimate their variable costs to be $200.00 per recliner. They figure their fixed costs to be $50,000 - $75,000 per year. How many recliners per year do they have to sell to at least breakeven?
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- Spring '10
- Ashwani
- Marketing, Diamond
