Simone likes peanut butter and jelly (PB&J) sandwiches. When Simone makes aPB&J sandwich she always uses 4 tablespoons of peanut butter and 2tablespoons of jelly. Suppose that the price of peanut butter is $0.05 pertablespoon and that the price of jelly is $0.15 per tablespoon. Simone livesabove a bakery and receives free day old bread from her baker friend. Theamount of Simone's income spent on PB&J sandwiches is $8 a week. Which ofthe following statements is true?A. Simone's indifference curves for peanut butter and jelly are normalindifference curves.B. Simone's indifference curves for peanut butter and jelly are straight lines,since she always eats peanut butter and jelly in a particular combination.C. Simone's indifference curves for peanut butter and jelly each have a rightangle, since peanut butter and jelly are perfect complements for Simone.D. Simone maximizes her utility from PB&J sandwiches by consuming 8sandwiches a week.OE. Answers (C) and (D) are both true.

Indifference curve analysis is the analysis of the consumer behaviour wherein the person tends to…

Answered: Simone likes peanut butter and jelly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Consider the following table, which listsJames’s marginal utility schedule for steak andhamburger meals: Given a budget of $45, how many steak and hamburgermeals will James buy per month to maximizehis total utility? What is the total utilityrealized?
Matt has $13 in income that he devotes entirely towards caffeine purchases, specifically coffee and tea. Tea costs $2/cup and coffee costs $3/cup. Also, tea is subject to a quantity tax of $4/cup, and coffee is subject to a value tax of 0%. By how much will the slope of Matt's budget constraint change if his income were to increase from $13 to $40?
Aidan has saved up $80 to spend on toys (T) and candy (C). The price of toys is$20, and the price of candy is $1. Every time Aidan buys (and pays for) 2 toys, he gets onemore toy for free. Draw Aidan’s budget line with candy on the Y-axis and toys on the X-axis.Label all intercepts and possible kink points. please hand draw graph and label
Mr. Chang can buy two goods- cake and juice. If he spends his entire income on cake, he can buy 30 cakes and if he spends his entire income on juice, he can buy 60 liters of juice. If the price of cake is $6/cake: What is the price of 1 liter of juice? Draw a neatly labeled diagram showing Mr. Chang’s possible consumer equilibrium clearly. If his income changes to $240, what would happen to Mr. Chang’s consumer equilibrium? Is he better off or worse off? Why? Indicate using a diagram.
34) Consider Dianna who has a $25 fast food budget per month. She can purchase salads (S), hamburgers (H), or chicken strips (C). The price of a salad is Ps=$3, the price of a hamburger is PB-$2 and the price of chicken strips is Pc $4. Fill in the table below. You will use your solutions to answer questions 34-36. # Hamburgers # Salads 1 2 2 MU Salads 36 30 c) 4; 3; 4 d) 5; 4; 5 MU/P Salads 1 2 3 4 5 MU hamburgers 5 In the optimal consumption bundle for Dianna, she will purchase chicken strips. a) 2; 1; 2 b) 3; 2; 3 28 22 16 36) Dianna total utility from her consumption bundle is a) 126 b) 504 c) 106 d) 398 MU/P # Hamburgers Chicken Strips T 2 3 7 salads, 4 5 35) Dianna's utility is maximized where the marginal utility per dollar spent on each item is equal to a) $10 b) $12 c) $14 d) $16 MU Chicken Strips 72 64 56 48 40 hamburgers, and MU/P Chicken Strips
Please answer carefully and explain in as much detail as possible.
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Enrique is a movie buff. He likes to watch on demand movies from his cable company, which cost $5 each, and so likes to go to the local movie house, which charges $15 a ticket. Suppose that given his budget and his tentative spending plans, the marginal utility from a cable movie is 15 utils and the marginal utility of a movie at the local cinema is 45 utils. Assuming he is spending his entire budget, Enrique is currently maximizing his utility Enrique can increase his utility by buying more cable movies and watching fewer cinema movies Enrique can increase his utility by buying more cinema movies and fewer cable movies
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Jim has made his best affordable choice of muffins and coffee. He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each. Muffins and coffee are ordinary goods. Now, the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup. Will Jim now be able and want to buy 10 muffins and 20 coffees? Which situation does Jim prefer: muffins at $1 and coffee at $2 a cup or muffins at $1.50 and coffee at $1.75 a cup? When the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup, Jim able to buy 10 muffins and 20 coffees. Jim O A. is; does not buy this combination because the marginal rate of substitution has changed. B. is; buys this combination because the marginal rate of substitution has not changed. O C. is not; does not buy this combination because with the change in price he can no longer buy 2 cups of coffee to drink with each muffin O D. is not; does not buy this combination because he can't afford it Jim prefers to…

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