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
eimsori [14]
3 years ago
11

Robert treats coffee and creamer as perfect complements and has very specific requirements for the ratio of creamer to coffee. H

e will drink coffee only if he has exactly 5.00 packets of creamer for every cup of coffee. Coffee is priced at $3.00 per cup and creamer at $0.25 per packet. In the questions below, give your answers to two decimal places.
a. Suppose that Robert has $39.00 to spend on coffee and creamer. His optimal consumption bundle contains _______cups of coffee and _________
b. Now, suppose that the price of creamer rises to $0.50 per packet. What is the substitution effect of this price change?
Business
1 answer:
diamong [38]3 years ago
6 0

Answer:

a. Robert's optimal consumption bundle contains <u>9.18</u> cups of coffee and <u>45.88</u> packets of creamer.

b. Zero packets of creamer is the substitution effect.

Explanation:

a. Suppose that Robert has $39.00 to spend on coffee and creamer. His optimal consumption bundle contains _______cups of coffee and _________

The consumption ratio can be stated as follows:

5 Creamer = 1 cup of coffee

Budget line has an equation can also be given as follows:

B = (Pm * Qm) + (Pf * Qf) ...................... (1)

Where;

B = Budget = The amount Robert has to spend on coffee and creamer = $39.00

Pm = Price of creamer = $0.25

Qm = Quantity of creamer = ?

Pf = Price of coffee = $3.00

Qf = Quantity of coffee = ?

39 = (0.25 * Qm) + (3 * Qf)

39 = 0.25Qm + 3Qf

Since "5 Creamer = 1 cup of coffee". This also implies thal 1 creamer = 1 / 5 cup of coffee. Therefore, we have;

39 = 0.25Qm + (3 * 1/5 * Qm)

39 = 0.25Qm + (3/5)Qm

39 = 0.25Qm + 0.60Qm

39 = 0.85Qm

Qm = 39 / 0.85

Qm = 45.88

Qf = 45 / 5 = 9.18

Therefore, Robert's optimal consumption bundle contains <u>9.18</u> cups of coffee and <u>45.88</u> packets of creamer.

b. Now, suppose that the price of creamer rises to $0.50 per packet. What is the substitution effect of this price change?

Since Robert treats coffee and creamer as perfect complements, this implies that there there is nothing like substitution effect under this condition.

Therefore, zero packets of creamer is the substitution effect.

You might be interested in
On the Navigation Bar, which of the following would you select to enter inventory item maintenance information?
4vir4ik [10]

Answer:

4. Maintain; Defaults, Inventory Items, record inventory information.

Explanation:

The question, in my understanding, is referring to master data of inventory items. Most enterprise inventory systems maintain attributes/information about a specific inventory item in a master table so that this record (and all other default info saved against it) can be pulled up and used in transactions as needed. Answers 1-3 are all pertaining to transactions and not maintenance information.

8 0
3 years ago
Which of the following is an example of a specific purpose? A. I want my employees to understand and follow the new dress code p
Alla [95]

Answer:

D. a and c

Explanation:

I hope it helps.

8 0
2 years ago
Peter Realtors, a real estate consulting firm, specializes in advising companies on potential new plant sites. The company uses
marissa [1.9K]

Answer:

1. Hourly Direct Labor Cost rate = Direct Labor cost / Direct Labor hours

Hourly Direct Labor Cost rate = 2,500,000 / 25,000

Hourly Direct Labor Cost rate = $100 per hour

<u>Computation of Indirect cost</u>

Office Rent                     $320,000

Support staff salaries    $1,260,000

Utilities                           <u>$420,000</u>

Total Indirect Costs      <u>$2,000,000</u>

Predetermined indirect cost allocation rate = = Total Estimated indirect cost / Total estimated direct labor cost  = 2,000,000 / 2,500,000  = 80% of Direct Cost

2.  Direct Labor            $25,000  (250 * 100)

Indirect Cost               <u>$20,000</u>  (25,000 * 80%)

Total Predicted cost   <u>$45,000</u>

3. Predicted cost                   $45,000

Desired Profit                       <u>$22,500</u> (50% of $45,000)

Required Service revenue  <u>$67,500</u>

4 0
3 years ago
Allen Lumber Company had earnings after taxes of $750,000 in the year 2015 with 300,000 shares outstanding on December 31, 2015.
GarryVolchara [31]

Answer:

Earning per share for the year 2016 is $2.68

Explanation:

For computing the earning per share, we have to use the formula of earning per share which is shown below:

= Net income ÷ total number of outstanding shares

where,

Net income is $937,500

And, the total number of outstanding shares equals to

= 2015 shares + 2016 shares

= 300,000 + 50,000

= 350,000

Now put these values to the above formula

So, the earning per share would be equals to

= $937,500  ÷ 350,000 shares

= $2.68

The earning after tax is not considered. Thus, it is ignored.

Hence, earning per share for the year 2016 is $2.68

4 0
3 years ago
Ron, a businessman who invests heavily in the stock market, has suffered a serious loss with his latest venture. The very though
IRINA_888 [86]

Answer: Escape avoidance

Explanation:

Escape avoidance also known as avoidance coping, is an approach that is used to deal with stress related issues. Escape avoidance is a form of coping which involves the changing of one's behavior in order to avoid thinking or feeling things that makes the person uncomfortable.

Escape avoidance involves trying to avoid stress than dealing with them.

It is a great way to relieve stress. Ron hanging out with friends after his losses is trying to take his mind away from the losses and relieve his stress. This is escape avoidance.

5 0
3 years ago
Other questions:
  • Why do companies lower product prices and offer free samples?
    5·2 answers
  • What is required to have a legally valid contract?
    7·2 answers
  • When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains ar
    10·1 answer
  • Paul is an analyst at an investment bank. He notices that many of the senior executives at his office go on European cruises, so
    7·1 answer
  • 18 Select the correct answer. What term refers to the process of focusing website content to attract more visitors (or hits)? A.
    7·1 answer
  • In many​ countries, people hold money as a cushion against unexpected needs arising from a variety of potential scenarios​ (e.g.
    10·1 answer
  • What is market positioning?<br> Read More &gt;&gt;
    13·1 answer
  • Consolidated Freightways is financing a new truck with a loan of $60,000 to be repaid in six annual end-of-year installments of
    5·1 answer
  • Adjustments ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the
    7·1 answer
  • (05.02 MC)
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!