When Carla made $400 each month, she bought 40 units of food at
$10 per unit and no shelter, which
cost $20 a unit. Then she received a raise to $600 each month and
she began consuming 30 units of food
at the same price and 15 units of shelter, which still cost $20 per
unit. Sketch Carla’s income-
consumption curve for food. Also sketch her Engel curve for food
and indicate whether food is a normal
or inferior good.
As income rises, consumption of F falls, so it's an inferior good, bcoz engel curve slopes downwards
When Carla made $400 each month, she bought 40 units of food at $10 per unit...
2. Suppose that Jesse earns $1,000 per month which she allocates between food and other goods. Assume that the average price of a unit of food is $5 and the price of other goods as $1. Currently, she maximizes her utility by purchasing 25 units of food each month. [5] a. With other goods on the y-axis and food on the x-axis, illustrate Jesse's budget constraint and an indifference curve at her optimal bundle. Label all relevant values. b. In...
A business is currently producing a = 400 units of its product per month. Assume the following is true: Its costs are C(400) = 8500, and the marginal cost is MC(400) = 10. . Its revenues are R(400) = 8800, and the marginal revenue is MR(400) = 22. (a) (6 points) Which of the following statements is true when production is at q = 400 units? (List the letters of all that apply - you do not need to explain...
Problem 6-2 Keebee, Inc. sells laptops for $1,000 per unit. Variable costs per unit are $400 and monthly fixed costs are $2,400,000. The contribution margin income statement for last month is as follows. Contribution Margin Income Statement 6,000 units sold Per unit Total Percent of sales Sales price $1,000 $6,000,000 100% Variable cost 400 2,400,000 40% Contribution margin $600 3,600,000 60% Fixed costs 2,400,000 Profit $1,200,000 Break-even units = $2,400,000 ÷ 600 = 4,000 Break-even sales = 4,000 × $1,000...
a. The Smith family has an income of $1,000 per month, and currently spends $400 monthly on food. Assume that the initial price of a unit of food is $1, and the initial price of a unit of “all other goods” is also $1. Draw this budget line, and also an indifference curve – which we assume has the standard shape – that the family can just reach, given its budget. b. The government considers that the Smith family is...
11. Chinene Investments produces only one type of product has 40 workers. Each one of them produces 20 units per month. The demand varies during the semester according to the following table Month 1 2 3 45 6 Demand (units) 700 600 500 800900 800 In order to increase/decrease production depending on the demand, the firm can offer some (paid) extra working time (each worker can produce at most 6 additional units per month at unit cost of 5 euros),...
Each month, Burrel Incorporated produces 500 units of a product. VC = $22 per unit. Total FC's = $4,800. A special sales order is received for 200 units of the product at a price of $28 per unit. In deciding to accept of reject the special sales order, it is appropriate to consider the: 1. Difference between the offered price and the variable cost per unit. 2. New fixed cost per unit of $6.86 3. Current fixed cost per unit...
The demand for a product is 12,500 units for a three month period. Each unit of product has a purchase price of $15 and ordering costs are $20 per order placed. The annual holding cost of one unit of product is 10% of its purchase price. What is the Economic Order Quantity (to the nearest unit)?
she does so she stimates that demand wil decrease by 20.000 units per month Calypso currently sells $1,000 units per The manager of Calypso, Inc. is considering raising its current price of $36 per unit by 10% month, each of which costs $24 in variable costs Fleed costs are $ 188,000. a. What is the current profit? b. What is the current break-even point in units (Round your answer to the nearest whole number If the manager raises the price,...
PLEASE SHOW ALL WORK A company handles an apartment building with 50 units. Experience has shown that if the rent for each of the units is $720 per month, all of the units will be filled, but 1 unit will become vacant for each $20 increase in this monthly rate. (a) At what price is revenue maximum? What is the maximum revenue and how many apartments are rented to reach this max? (b) If the monthly cost of maintaining the...
It costs Camp, Inc. $46 per unit to manufacture 1,000 units per month of a product that it can sell for $76 each. Alternatively, Camp could process the units further into a more complex product, which would cost an additional $39 per unit. Camp could sell the more complex product for $107 each. How would processing the product further affect Camp's profit? Profit would increase by $8,000. Profit would increase by $31,000. Profit would decrease by $8,000. Profit would decrease...