Tom and Abby produce rackets and balls. The tables show their production possibilities. Tom allocates all his resources and produces 2 rackets and 16 balls an hour. Abby allocates all her resources and produces 2 rackets and 4 balls an hour. Tom and Abby decide to specialize and trade. specializes in rackets and produces specializes in balls and produces A. Tom; 2 rackets; Abby; 32 balls B. Tom; 4 rackets; Abby; 8 balls C. Abby; 4 rackets; Tom; 32 balls D. Abby; 2 rackets; Tom; 8 balls E. Tom; 4 rackets; Tom; 32 balls The number of balls produced by 0. If Tom and Abby specialize and trade 1 racket for 8 balls, gets rackets from for less than it gets balls to produce costs from them. to produce them, and for less than it costs Tom's Production Possibilities Rackets (per hour) 0 1 2 3 4 Abby's Production Possibilities Rackets (per hour) and and and and and 0 1 2 3 4 and and and and and Balls (per hour) 32 24 16 8 0 Balls (per hour) ON 69 00 8 4 2 0

5. If you can sell 10 computers for $1400 each or 11 computers for $1300 each, and the marginal cost is $1000, what should you do and what is the profit?

Question 32 The last unit purchased of good "X" gave you marginal utility = 3 and cost $10/unit. The last unit purchased of good "Y" gave you marginal utility = 1 and cost $4/unit. To maximize your utility you should: do nothing since you are already maximizing. O buy more of good "X" and less of good "Y." O buy less of good "X" and more of good "Y."

ECONOMICS LECTURE NOTE 5.1.3 Example Use the table below to answer the questions that follows Commodity x Quantity Commodity y Quantity Marginal utility 60 Average utility 1 30 2 50 2 27 3 35 3. 22 4 15 4. 18 5 5 15 6. 6. 12 iii. Which of the commodities would he pay higher price when 4 units are consumed? Suppose the price of X is 5 and that of Y is 4. How many of the quantity of X and Y should be consumed in order for the consumer to be in iv. equilibrium. If price of X increase to 10 whiles that of Y remains the same, explain how the equilibrium conditions will behave.