Marginal utility for cups of coffee is constant

Assignment Help Business Economics
Reference no: EM131007197

Suppose that Omar’s marginal utility for cups of coffee is constant at 4.5 utils per cup no matter how many cups he drinks. On the other hand, his marginal utility per doughnut is 11 for the first doughnut he eats, 10 for the second he eats, 9 for the third he eats, and so on (that is, declining by 1 util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $1 each, and Omar has a budget that he can spend only on doughnuts, coffee, or both. How big would that budget have to be before he would spend a dollar buying a first cup of coffee?

Explain please.

Reference no: EM131007197

Questions Cloud

Amount of capital at the beginning of a year : The difference between the amount of capital at the beginning of a year and the amount of capital at the end of the year is equal to
Mohs scale rates the hardness of minerals : The Mohs scale rates the hardness of minerals. If one mineral can scratch another, it is judged to be harder. (Diamond, the hardest mineral, is a 10.) Is hardness related to the weight of a 1 * 1 * 1 cm cube of the mineral?
Prepare closing entries and trial balance : The last payday was December 26. Employees are owed an additional $3,900 that has not been recorded.
An efficiency wage is designed to : An efficiency wage is designed to
Marginal utility for cups of coffee is constant : Suppose that Omar’s marginal utility for cups of coffee is constant at 4.5 utils per cup no matter how many cups he drinks. On the other hand, his marginal utility per doughnut is 11 for the first doughnut he eats, 10 for the second he eats, 9 for th..
Distributions of the ratings of a new distance : Testing whether the distributions of the ratings of a new distance learning course were the same as rated (on the usual 5-point Likert scale) by Freshmen, Sophomores, Juniors, and Seniors who had taken the course.
Describe difference between a danger sign and a caution sign : Design a danger sign and a caution sign for a power press. For specifications search online at http://www.osha.gov for 29 CFR 1910.145 entitled Specifications for accident prevention signs and tags. Describe the difference between a danger sign a..
What is the preliminary review portion of an audit : What is the preliminary review portion of an audit and why is it important?
Actions create any postive or negative externailty : Discuss whether each of the following actions create any postive or negative externailty??

Reviews

Write a Review

Business Economics Questions & Answers

  Analyze marketing strategies in reaching market with product

Analyze marketing strategies in reaching markets with their products or services. Continue with a detailed description of marketing management strategies used in the implementation of the marketing plan. Conclude with the integrative strategies used ..

  Most people feel health care is priceless however health

most people feel health care is priceless however health care comes with a steep cost. what factors must be considered

  What is the process by which recessionary gap closes itself

What is the process by which a recessionary gap closes itself? Explain. Why might this self-correcting mechanism work slowly in the face of a recessionary gap?

  Other income redistribution programs and policies

Compare and contrast the Swedish and American approaches to welfare and other income redistribution programs and policies.

  Fixed exchange rate system instead of flexible exchange rate

Some countries have fixed exchange rate systems instead of flexible exchange rate systems. Which of the following is a reason why fixed exchange rate systems have limited abilities to use monetary policy?

  What is the expected return for this bond if market price

Your company is interested in analyzing the behavior of interest rates and the models used to predict interest rates in the future. As an initial project in this area, you have been assigned the task of creating a presentation that will show the top ..

  Reduces costs of both real estate and labor

A multi concept restaurant incorporates two or more restaurants, typically chains, under one roof. Sharing facilities reduces costs of both real estate and labor. The multi concept restaurants typically offer a limited menu, compared with full-sized,..

  Price level is completely fixed in the short run

An economy is operating with output $400 billion below its natural level, and fiscal policymakers want to close this recessionary gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out.

  Equivalent annual worth of costs

Wwhat is the equivalent annual worth of costs for the website over a total of 6 years at an interest rate of 12% per year.

  Q1 a consumer must pay 10 per visit to an amusement park

q1. a consumer must pay 10 per visit to an amusement park for the first five visits but only 5 per visit beyond five

  Based on the cost and the demand

In neoclassical economics, based on the cost and the demand, a firm is assumed to choose its profit maximizing level of output. According to Hayek, what’s the problem with these assumptions?

  Using a three-circle venn diagram-categorical arguments

Using a three-circle Venn Diagram, check the following categorical arguments for validity. Some advertisers try to create a new ideal state for consumers. Some advertisers try to create dissatisfaction with the consumer’s current state. So, some who ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd