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Rama09 [41]
3 years ago
7

Stella is currently spending all of her weekly income purchasing the two goods that she likes cookies and milk. She is currently

purchasing 10 cookies and 5 cartons of milk. She receives 50 utils from her 10th cookie and 25 utils from her 5th carton of milk. The price of cookies is ​$9​, and the price of milk is ​$3. Is Stella maximizing her​ utility, and if​ not, what should she​ do?
Business
1 answer:
Ivan3 years ago
8 0

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

= \frac{MUx}{Px}

= \frac{50}{9}

= 5.55

Ratio for milk

= \frac{MUy}{Py}

= \frac{25}{3}

= 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.

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Answer:

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Explanation:

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Kahil Mfg

Weighted Average Method

Particulars        Units          % Of Completion             Equivalent Units

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Beginning

Inventory     400                70                 85             280               350

<u>Units Started  3800          40                  60            1520             2280         </u>

<u>Equivalent Units                                                        1700              2630</u>

<u />

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                                               Direct material             Conversion  

                                                     $ 4,349                        4,658

Current period costs

<u>                                                        60,775                        46,750        </u>

<u>Total Costs                                 65,124                          51,408            </u>

<u />

<u>Cost per EUP</u>

                                               65,124/1700              51,408/2630

                                                 38.308                      19.55

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Answer:

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