Annual transport costs are equal to $2.40 per (round-trip) mile each day, times five days per week and 50 weeks per year.

Based on the table below, find the distance from the CBD that a consumer would choose to live at in order to maximize their utility.

For simplicity, consider the marginal cost and marginal benefit of moving from a location of 1 mile from the CBD to 2 miles from the CBD to be the marginal cost and benefit AT 2 miles from the CBD, similarly for 2 to 3 miles, 3 to 4 miles and so on. (This is because the question does not require calculus and we want to keep it simple).

p is the price per square foot of housing for a one year rental. q is housing in square feet.

Q2.

Based on the information provided in the previous question, if the household lives at a distance of five miles from the CBD, how much bread will they be able to consume per year, if their annual income is $12,000

Miles from q110012001300140015001600170018001900200021002200p139642.81.81.20.80.60.50.450.43