QUESTION 30 6 pointsSave Answer Given the following information should you go to

Question

QUESTION 30 6 pointsSave Answer Given the following information should you go to a movie or eat out at Chick Fil A tonight? Marginal Utility for another movie this week is 25 and the cost is $10. Marginal Utility for another Deluxe Chicken Sandwich meal is 18 and it cost $6.00 O You should purchase the chicken sandwich sinces its utility per Dollar $3.00 and the utility per dollar for the movie equals $2.50 O You should choose the movies sinces its marginal utility is greater at 25 versus the sandwich marginal utility of 18. Dollar. O There is not enough information to make an intelligent decision. 5 points QUESTION 31 Price should be higher, ATOC O higher, AVC O equal, AVC equal; ATOC Save Answer to for a firm to earn a normal economic profit.

Explanation / Answer

Ans:

30) You should purchase the chicken sandwich since its utility per dollar equals $3 and the utility per dollar for the movie equals $2.5.

Marginal utility is the additional satisfaction a consumer gains by consuming one more unit of a good or service.In this case the decision is based on the utility per dollar gained from chicken or movie.since utility per dollar is higher for chicken it should be purchased because it maximizes utility.

31) higher ; ATC

If the firm has to earn profits it should charge a price that is higher than its average cost of production of quantity produced.

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