Gell Corporation manufactures computers. Assume that Gell:
1 answer:
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Answer:
Stella should consume less of milk and more of cookies to maximize total utility.
Explanation:
The price of cookies is $9, and the price of milk is $3.
Stella consumes 10 cookies and 5 cartons of milk.
The marginal utility of 10th cookie is 50 utils and the marginal utility of 5th carton of milk is 25 utils.
Her total utility will be maximized if the ratio of marginal utility and price will be equal for both cookies and milk.
Ratio for cookies
=
=
= 5.55
Ratio for milk
=
=
= 8.33
Since the ratio is higher for milk, it means that Stella should consume less of milk and more of cookies to maximize total utility.
The worth of investment in 18 years will be $1,096.96 after adding $736.96 of the interest amount compounded quarterly.
Computation:
Given,
Principal amount =$360
Interest rate =4%
Time period =18 years
The formula used to determine the compound interest amount is:
Substituting the values in the formula:
Therefore, the correct answer for the worth of investment is $736.96.
To know more about compound interest, refer to the link: