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SVETLANKA909090 [29]
3 years ago
6

Consider the last purchase of two goods by a consumer. A bag of chips costs $1.75 and the marginal utility is 20. A cup of chili

costs $2.50. What must the marginal utility of chili be for the consumer to maximize total utility
Business
1 answer:
Igoryamba3 years ago
5 0

Answer:

The marginal utility of chili must be 28.57 for the consumer to maximize total utility.

Explanation:

The marginal utility of chili at which the consumer maximizes total utility can be calculated as follows:

Let:

CCHIP = Cost of a bag of chips = $1.75

MUCHIP = Marginal utility of a bag of chips = 20

CCHILI = Cost of a cup of chili = $2.50

MUCHILI = Marginal utility of a cup of Chili = ?

The condition for the utility maximization of the consumer is as follows:

MUCHIP / CCHIP = MUCHILI / CCHILI ……………………………. (1)

Substituting all the relevant values into equation (1) and solve for MUCHILI, we have:

20 / 1.75 = MUCHILI / 2.50

(20 / 1.75) * 2.50 = MUCHILI

MUCHILI = 28.57

Therefore, the marginal utility of chili must be 28.57 for the consumer to maximize total utility.

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With rising costs, the 21st century might see a shift towards a more direct approach.
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Answer:

it is type and price range.

3 0
3 years ago
Tonya operates a nail salon as a sole proprietorship. Tonya also owns and rents an apartment building. This year Tonya had the f
Gala2k [10]

Answer:

Tonya's AGI $70,335

Explanation:

Tonya's AGI:

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Salaries paid to beauticians ($113,125)

Nail salon supplies ($58,500)

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                   +

Interest income $28,138

                   +

Rental revenue from apartment building $78,050

Depreciation on apartment building ($32,250)

Real estate taxes paid on apartment building ($27,750)

Rental income $18,050

                    -

Alimony paid to her husband $15,000

                    -

Self-employment tax on salon income $3,128

                    -

Interest expense on education loan $2,000

                   =

Tonya's AGI $70,335

Real estate taxes paid on Tonya's house and charitable contributions are itemized deductions (below the line deductions).

3 0
3 years ago
"Bubba is a shrimp fisherman who used $2,000 from his personal savings account to buy a boat and equipment for his shrimp busine
Katyanochek1 [597]

Options:

A. $20

B. $200

C. $40

D. $400

Answer:C. $40

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Opportunity cost for Bubba can be calculated as follows

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Opportunity cost helps economists to ensure that resources are effectively put to use.

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3 years ago
Select all that apply.
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The answer is memos, emails, and research papers.
7 0
3 years ago
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