Question

1. Coffee costs $1.50 per cup, a cookie costs $0.75 Kris decides to spend all her money on these items. The last cup of coffee yields MU of 25 units, the last cookie yields MU of 5 units. Given this information Kris should: a. buy more coffee and fewer cookies b. buy less coffee and more cookies c.not change her consumption of coffee and cookies. d. buy more coffee and more cookies. 2. Using the data below, we can determine that the law of diminishing MU: Units Marginal Utility Marginal Utility of good of good B 11040 2 10 33 3 10 24 10 14 a. applies to Good A but not Good B. b. does not apply to either Good A or Good B c applies to Good B but not Good A. d. applies to both Good A and Good B. 3. The table below shows a pizzeria's fixed cost and variable cost at different levels of output. Pizza's sell for $18 each. Number of Pizzas per day Fixed cost Variable cost ($/day) (S/day) 500 0 500 150 250 500 450 500 850 500 1650 25 50 75 100 125 500 its total cost is and its total revenue is When the pizzeria makes 75 pizzas a day, its fixed cost is a $150; $950$1,500 b. $500: $950: $1,350 c. $500; $1,450: $1,350 d. $850; $1,350: $1,800

Answer 1

a) "A"

H should be buying more coffee and less cookies.

b) "C"

Applies to good B but not good A.

c) "B"

Fixed cost is 500 and the total cost is 950, and total revenue is 1350.