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DENIUS [597]
4 years ago
11

Lisa consumes only pizzas and burritos. In equilibrium, her marginal utility of pizza is 30 and her marginal utility of a burrit

o is 24. The price of a pizza is $5.
Business
1 answer:
balandron [24]4 years ago
3 0

Complete question is stated below:

Lisa consumes only pizzas and burritos. In equilibrium, her marginal utility of pizza is 30 and her marginal utility of a burrito is 24. The price of a pizza is $5. What is the price of a burrito?

Explanation:

When there is equilibrium, the ratio of the marginal utility of a one commodity divided by the price of that commodity must be equal to the marginal

utility of 2nd commodity divided by the price of a 2nd commodity.

Therefore:

Marginal utility of pizza / Price of Pizza = Marginal utility of Burrito / Price of Burrito

\frac{30}{5}=\frac{24}{x}  \\x= \frac{24*5}{30} \\x=120/30\\x=4

Thus, the price of a burrito must be $4.

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If the foreign currency is moving from a surplus to equilibrium, it means that the supply is falling and is almost equal to demand. This would lead to a depreciation of the exchange rate and domestic good would become less expensive

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