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SSSSS [86.1K]
2 years ago
13

Juan spends all of his income on baseball cards and candy. At his current consumption bundle, the marginal utility of baseball c

ards is 20 and the marginal utility of candy is 10. Assuming that diminishing marginal utility applies to both goods, if the price of baseball cards is $10 and the price of candy is $2, Juan should:
continue to consume the current bundle.
consume more candy and fewer baseball cards.
consume more baseball cards and less candy.
consume equal amounts of baseball cards and candy.
Business
1 answer:
shtirl [24]2 years ago
7 0

Answer:

Juan should consume more baseball cards and less candy.

Explanation:

Juan spends all of his income on baseball cards and candy.  

The marginal utility of baseball cards is 20 and the marginal utility of candy is 10.  

The price of baseball cards is $10 and the price of candy is $2.  

The total utility will be maximized if the ratio of marginal utility and price of a good is equal for both the goods.  

The ratio for baseball cards

= \frac{MUx}{Px}

= \frac{20}{10}

= 2

The ratio for candy

= \frac{MUy}{Py}

= \frac{10}{2}

= 5

Since, the ratio is greater for candy and lesser for baseball cards, Juan should consume more baseball cards and less candy.

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If the federal reserve banks mailed everyone in the United States a new $1000.00 bill, what would happen to prices, output, and
Artemon [7]

If the Fed mailed everyone a $1,000, the effect would be a <u>rise in prices, </u>output, and income.

<h3 /><h3>What happens when money is injected into the economy?</h3>

The Equation of exchange is:

<em>Money supply x Velocity of money = Price level x Quantity of goods and services produced </em>

If the Money supply increases like it will when $1,000 is sent by the Fed to people, the velocity will also rise as people purchase more goods and services.

The Price level and the Quantity produced on the right side of the equation would also have to rise to match the left side. So prices would rise, and so would output.

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4 0
1 year ago
Chang Industries has 2,500 defective units of product that have already cost $14.50 each to produce. A salvage company will purc
Lubov Fominskaja [6]

Answer:

$27,250

Explanation:

The computation of incremental income or loss on reworking the units is shown below:-

For computing the incremental income or loss on reworking the units first we need to follow some steps which is shown below:-

Incremental revenue per unit = Selling price after rework - Selling price as scrap

= $22.00 - $5.60

= $16.40

Total Incremental Revenue = Incremental revenue per unit × Total defective units

= $16.40 × 2,500

= $41,000

Total rework costs = Total defective units × Defects per unit

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Now,

Incremental income or loss on reworking the units = Total Incremental Revenue - Total rework costs

= $41,000 - $13,750

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7 0
3 years ago
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2 years ago
Has a government monopoly in home mail delivery, but several private companies, such as fedex, ups, and dhl, compete with:____.
Katena32 [7]

Has a government monopoly in home mail delivery, but several private companies, such as FedEx, ups, and DHL, compete with <u>USPS</u>.

The government affords public offerings just like the railways. subsequently, they are a monopolist due to the fact new companions or privately held groups aren't allowed to run railways. but, the fee of the tickets is affordable so most people can use public shipping.

The government affords public offerings like the railways. hence, they're a monopolist because new companions or privately held businesses are not allowed to run railways. however, the fee for the tickets is cheap so most people can use public shipping.

As a result, absolutely is certainly one of the biggest monopolies in present the global. The enterprise, in reality, monopolizes several other different markets within the globe.

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5 0
1 year ago
Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are conc
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