Assuming john's parents do not allow him to use any savings. What is the optimal consumption bundle of pizza and funnel cakes? E
1 answer:
The optimal quantity of pizza slices for John to buy is 5 slices.
<h3>How to calculate the quantity?</h3>From the information given in the diagram, it can be seen that the marginal utility from the consumption of the 6th slice is zero.
In this case, the optimal quantity of pizza slices for John to buy is 5 slices.
When John buys 8 slices, the total utility will be:
= 20 + 12 + 10 + 6 + 2 + 0 - 2 - 6
= 42 utils.
When John’s parents do not allow him to use any savings, his optimal consumption bundle of pizza and funnel cakes is $20.
At John’s optimal consumption bundle, the total utility that he will gain will be:
= (20 + 12) + (50 + 40 + 32 + 20)
= 32 + 142
= 174 utils
Learn more about optimal quantity on:
#SPJ4
You might be interested in
Answer:
$52,285
Explanation:
The computation of the total manufacturing cost assigned to Job P is shown below:-
Total manufacturing cost = Direct material + Direct labor + Manufacturing overhead applied
= $13,000 + $21,000 + (2,300 × $7.95)
= $13,000 + $21,000 + $18,285
= $52,285
Therefore for computing the total manufacturing cost assigned to Job P we simply applied the above formula.
