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balu736 [363]
2 years ago
13

Assuming john's parents do not allow him to use any savings. What is the optimal consumption bundle of pizza and funnel cakes? E

xplain.
Business
1 answer:
tamaranim1 [39]2 years ago
5 0

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:

brainly.com/question/15700934

#SPJ4

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Based on the amounts that you are offered and their present values, the offer you should pick is Birr 10,000 in 12 years.

<h3>Which offer should you pick?</h3>

You should pick the offer with the highest present value.

Offer 1 present value:

= Birr 1,000

Offer 2 present value:

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In conclusion, option 2 has the highest present value and so should be picked.

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4 0
1 year ago
Radovilsky Manufacturing Company , in Hayward, California, makes flashing lights for toys. The company operates its production f
IRISSAK [1]

Answer:

Explanation:

Given Demand D = 12,500 lights per year

Set up cost S = $51

Cost of each light (C) = $1 .05

Holding cost = $0.1 per light per year

Production p= 100 lights per day

Usage (d) = 12,500/300 days = 41.66(round up to 42)

= 42 lights per day

a) What is the optimal sizeof the production run?

Q =√{(2×D×S) / (H(1-(d / p)))}

Q =√{(2×12500×51)/(0.1(1-(42/100)))}

= 4688.577 = 4689 units

Q = 4689 units

b) What is the average holding cost per year?

Average holding cost per year = average inventory level * H

= (Q/2)H[1- (d/p)]

= (4689/2)0.1[1-(42/100)]

= $135.98

c) What is the average setup cost per year?

average setup cost per year = (D/Q)S

= (12,500/4689)× 51

= 135.97

d) What is the total cost per year, including the cost of the lights?

Total cost = D*C + total set up cost + total holding cost

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Total cost = $ 13,396.95

6 0
2 years ago
Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:_____.
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Monetary policy is the macroeconomic policy set by the central bank. It involves the management of the money supply and interest rates, and is the demand-side economic policy adopted by national governments to achieve macroeconomic goals such as inflation, consumption, growth and liquidity.

Monetary policy is the action and communication of the central bank that controls the money supply. Central banks use monetary policy to prevent inflation, reduce unemployment, and promote moderate long-term interest rates.

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3 0
1 year ago
Gourmet Pets is interested in computing the breakeven quantity for its new product, Prime Cuts. The annual fixed costs that must
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Answer:

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Variable cost= $2

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To calculate the break-even quantity, we use the formula

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Let's input the values of each

$750,000/($6 - $2)

= $750, 000/ $4

= 187,500 units.

Therefore the break even is 187,500 units.

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