Question

Jane likes pizzas and burritos. Pizzas sell for $5 each, and burritos sell for $2 each....

Jane likes pizzas and burritos. Pizzas sell for $5 each, and burritos sell for $2 each. At her optimal bundle, her marginal utility per dollar on pizzas equals 20. What is the marginal utility per dollar on burritos?

  1. 20.
  2. 30.
  3. 40
  4. 50
  5. None of the above.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Given that,

Price of pizza = $5 each

Price of burritos = $2 each

At the optimal bundle, the marginal utility per dollar for pizza = 20

Jane's utility is maximized at a point where the marginal utility per dollar for both pizza and burritos are equal.

At the utility maximizing condition,

Marginal utility per dollar for pizza = Marginal utility per dollar for burritos

20 = Marginal utility per dollar for burritos

Therefore, the Marginal utility per dollar for burritos at the optimal point is equal to 20.

Hence, the correct option is (A).

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Andrea allocates her $30 weekly lunch budget between 2 goods, pizza and burritos. Each pizza costs...
Andrea allocates her $30 weekly lunch budget between 2 goods, pizza and burritos. Each pizza costs $5 and burritos cost $3. a. Illustrate Andrea’s optimal bundle on a graph with pizza on the horizontal axis and where she consumes 3 pizzas a week and spends the rest of her budget on burritos. b. Suppose that pizza is taxed causing the price to increase by 20%. Show Andrea's new optimal bundle on your graph in part a, where she now only...
Lisa spends all her income on pizzas and soda. The table below shows Lisa’s marginal utility...
Lisa spends all her income on pizzas and soda. The table below shows Lisa’s marginal utility for pizza and marginal utility for soda. If the price of pizza is $10, the price of soda is $5, and Lisa has $40 to spend on the two goods: State the equation of Lisa’s equilibrium. Construct a table based on the equation from the table below. How much is the marginal utility per dollar at equilibrium? What combination of the two goods will...
Number of Workers Number of Pizzas 1 20 2 40 3 65 4 80 5 90...
Number of Workers Number of Pizzas 1 20 2 40 3 65 4 80 5 90 6 95 7 90 For questions a and b refer to the above table: The table refers to the number of quantity of pizzas that can be produced in a day what is the marginal product of the 4th worker? With which worker will diminishing returns set in?
2. Kyle owns a pizzeria. The number of pizzas he can make depends on his production...
2. Kyle owns a pizzeria. The number of pizzas he can make depends on his production function. q(E, K) = EK With this function, the marginal product of employment is K, and the marginal product of capital is E. He must use the markets price for labor, $8, and capital, $10. (a) Assuming that he must make 80 pizzas per day, what is his optimal bundle of employees and capital? (b) Now, the government implements a new living wage of...
Charlie likes buying shoes and going out to sing. His utility function for pairs of shoes,...
Charlie likes buying shoes and going out to sing. His utility function for pairs of shoes, S, and the number of times he goes singing per month, T, is U(S,T)=2S^2T^2 . It costs Charlie $50 to buy a new pair of shoes or to spend an evening out singing. Assume that he has $500 to spend on shoes and singing. a. What is the equation for her budget line? Draw the budget constraint with the T on the vertical axis,...
1)An increase in one product price but not the other: a. shifts the budget line parallel...
1)An increase in one product price but not the other: a. shifts the budget line parallel to the left b. shifts the budget line parallel to the right c. changes the slope of the budget line d. doesn’t affect the budget line because income remains constant 2)Assume you allocate your time between attending classes (which take 2 hours) and working out (which take 1 hour). To maximize your total utility, you will choose a bundle where: a. the marginal utility...
Suppose that as a consumer you have $34 per month to spend on munchies—either pizzas, which...
Suppose that as a consumer you have $34 per month to spend on munchies—either pizzas, which cost $6 each, or Twinkies, which cost $4 each. Suppose further that your preferences are given by the following total utility table. Create a set of marginal utility tables for each product, like the ones below. Remember that they must show diminishing marginal utility as more of each product is consumed. Create the corresponding set of total utility tables for each product. Graph the...
Use the table showing output and costs for Betty Lou's Burritos to answer the questions. Round...
Use the table showing output and costs for Betty Lou's Burritos to answer the questions. Round your answers to two decimal places. Labor (workers per day) Output (units per day) Total fixed cost ($ per day) Total variable cost ($ per day) Total cost ($ per day) 0 0 50 0 50 1 8 50 25 75 2 12 50 50 100 3 20 50 75 125 4 25 50 100 150 5 32 50 125 175 What is the...
Julie has preferences for food, f, and clothing, c, described by a Cobb-Douglas utility function u(f,...
Julie has preferences for food, f, and clothing, c, described by a Cobb-Douglas utility function u(f, c) = f · c. Her marginal utilities are MUf = c and MUc = f. Suppose that food costs $1 a unit and that clothing costs $2 a unit. Julie has $12 to spend on food and clothing. a. Sketch Julie’s indifference curves corresponding to utility levels U¯ = 12, U¯ = 18, and U¯ = 24. Using the graph (no algebra yet!),...
1a. Joy, who has an income of $40, can spend her income on 2 different goods,...
1a. Joy, who has an income of $40, can spend her income on 2 different goods, smoothies and energy bars. Energy bars cost $2 each, and smoothies cost $4 each. Draw her budget line. 1b. Can she buy 10 energy bars and 5 smoothies? Why or why not? 1c. The following table shows her utilities from smoothies and energy bars. 2 Quantity of smoothies Utility from smoothies Marginal utility MU / Price of smoothies Quantity of energy bars Utility from...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT