1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
LuckyWell [14K]
3 years ago
8

In spending all his income on beer and pizza, Fred finds that the marginal utility of the last pizza he consumed is 8, and the m

arginal utility of the last bottle of beer is 4. The price of a bottle of beer is $1.50. If Fred has maximized his utility, the price of pizza must be
Business
1 answer:
andrew-mc [135]3 years ago
3 0

Answer:

For a utility maximization, the pizza's price has to be $3.

Explanation:

The condiction to said that the utility has been maximized, is that the marginal utility for every dollar is the same for every factor (in this case, pizza and beer).

We can express that as

\frac{dU/dpizza}{P_{pizza}}= \frac{dU/dbeer}{P_{beer}}

Being dU/dpizza the marginal utility of pizza and dU/dbeer

If we want to know the price of pizza, we have to rearrange the equation

\frac{dU/dpizza}{P_{pizza}}= \frac{dU/dbeer}{P_{beer}}\\\\P_{pizza}=P_{beer}*\frac{dU/dpizza}{dU/dbeer}}\\P_{pizza}=1.5*(8/4)=1.5*2=3

In this case, for a utility maximization, the pizza's price has to be $3.

You might be interested in
A company is concerned about the number of customers that have to wait for service in their customer service department. Assume
uysha [10]

Answer:

E) None of these

Explanation:

Calculation to determine which of the following is the mean time between arrivals

Using this formula

Mean time between arrivals = 1/Arrival rate

Let plug in the formula

Mean time between arrivals= 1/12

Mean time between arrivals= 0.0833 hours or 5 minutes

Therefore the Mean time between arrivals will be 0.0833 hours or 5 minutes

4 0
3 years ago
A citizen of one country working in another country and employed by an organization headquartered in the first country in called
KonstantinChe [14]

Answer:

A person who works in a company belonging to another country is called an expatriate. These high-ranking personnel are generally sent to other countries, mainly to promote the organizational culture of the company and for corporate purposes to be fulfilled.

It can also be used to train staff in the new country where there are expansion plans.

For example: An operations manager who is moved to another country to manage a new plant of a group, this will be responsible for promoting knowledge and align the ideas of the parent company with the company of the other country.

5 0
3 years ago
2) Economic Growth: Use the PPF from above to illustrate the effects of saving and investment upon national GDP. Use a PPF to sh
Inessa [10]

Answer and Explanation:

Economic Growth can be defined as an increment in production capacity of an economy using all its available resources. The PPF illustrates the largest possible quantity of goods and services a nation can produce base on its available resources. An outward shift in the economy’s production possibility frontier (PPF) depicts  a raise in productive capacity of an economy.  An outward shift implies that an economy has capacity to  increase its production outputs. This can be as a result of   the economy employing new technology, allowing specialization, increasing its labour force, using new production approaches etc. Likewise, an inward shifting PPF implies an economy has witness a loss or exhaustion of some of its scarce resources and it will culminate into reduction in an economy’s productive potential.

Effects of saving and investment upon national GDP

level of savings direct related to the level of investment, investment feeds on available finance from saving. If more people save, the banks will be able  to lend more to firms to support their investments.

low savings and investment implies a PPF inward shift. low savings  in economy implies that the economy is opting for short-term consumption over long-term investment, and this will lead to future undue pressure on available infrastructures ad resources.

spending  on consumer goods vs capital goods effect on the economy

In the short run, the economy must prefer using available resources to produce capital rather than consumer goods. Standards of living will be affected, as private consumption will have access to fewer resources. However, in the longer run, the raised production of capital goods will boost  the production of more consumer goods ad therefore standards of living will experience more increase than they would have witness if the economy had spent most of its income on consumer goods.

6 0
4 years ago
Assume that a U.S. firm considers investing in British one-year Treasury securities. The interest rate on these securities is 12
MArishka [77]

Answer:

equal to the british interest rate

Explanation:

Data provided in the question

The Interest rate on these securities = 12%

In the U.S, the interest rate = 10%

Also the spot rate for today would become suitable for the spot rate

Based on the above information, the effective yield on the british securities would be equivalent to the british interest rate and hence the same is to be considered

7 0
3 years ago
Suppose Intel stock has a beta of 1.6, whereas Boeing stock has a beta of 1. If the risk-free interest rate is 4% and the expect
AnnyKZ [126]

Answer: see affixed, a document containing the solution

Explanation:

8 0
3 years ago
Other questions:
  • What is required to have a legally valid contract?
    7·2 answers
  • Bramble Corp. sells MP3 players for $60 each. Variable costs are $30 per unit, and fixed costs total $120000. How many MP3 playe
    10·1 answer
  • If you bought Nike stock for $76 a share and sold them for $100 per share, your profit was
    10·1 answer
  • Amy and Lance are newlyweds. This is Lance's second marriage. Because of problems that occurred before his divorce (his ex-wife
    6·1 answer
  • Aggregate supply (AS) in the short run denotes the relationship between the __________________ that firms choose to produce and
    15·1 answer
  • Kevin thought the laptop was priced too high, but when he found out that it came with a free printer, he decided it was worth th
    13·1 answer
  • A decline in interest rates is expected to __________.
    13·2 answers
  • If the federal reserve lowers the federal funds rate, what will happen to bank savings account?
    10·1 answer
  • Who should Jake Paul fight next? Currently in an argument with my brother!!
    7·1 answer
  • According to the growth-share matrix, __________ are high-share, high-growth products. when the market growth slows these produc
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!