Question
Maria has $6.25 to spend on breakfast. Unfortunately, the snack bar in the building where she works has only three items: muffins at $1.50 each,
Maria has $6.25 to spend on breakfast. Unfortunately, the snack bar in the building where she works has only three items: muffins at $1.50 each, soup at $1.25, and cappuccinos at $1.00 each.
a) Given her total utility figures in table below, Complete the MU columns. Round your answers to whole numbers.
Quantity | Muffins TU | Muffins MU | Muffins MU per $ | Soup TU | Soup MU | Soup MU per $ | Cappuccinos TU | Cappuccinos MU | Cappuccinos MU per $ |
1 | 114 | 70 | 50 | ||||||
2 | 180 | 120 | 95 | ||||||
3 | 228 | 150 | 130 | ||||||
4 | 267 | 160 | 150 | ||||||
5 | 285 | 165 | 152 |
b) How should she allocate her budget?
Muffin(s): _____
Soup: ______
Cappuccino(s): ______
Step by Step Solution
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Step: 1
a To complete the MU Marginal Utility columns we need to calculate the marginal utility for each item and the corresponding marginal utility per dollar spent Quantity Muffins TU Muffins MU Muffins MU ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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Introduction To Management Science A Modeling And Cases Studies Approach With Spreadsheets
Authors: Frederick S. Hillier, Mark S. Hillier
5th Edition
978-0077825560, 78024064, 9780077498948, 007782556X, 77498941, 978-0078024061
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