Economics

Managerial Economics. 1) Brid break has a limited income and consumes only wine-colored and spirited mallow; her current phthisis choice is four bottles of wine and 10 pounds of stop. The price of wine is $10 per bottle, and the price of high mallow is $4 per pound. The subsist bottle of wine added 50 units to Bridgets proceeds, position the remainder pound of cheese added 40 units. (a)Is Bridget making the expediency maximizing choice? why or Why non? no Bridget is not making the good maximizing choice. At utility maximizing combination, the marginal utility per unit of silver fatigued is equal for each good. MU wine = 50 Pwine = 10 So, marginal utility per unit of money for wine =MU wine / Pwine = 50/10 = 5.00 MU cheese = 40 Pcheese = 4 So, Marginal utility per unit of money for cheese= MU cheese / Pcheese = 40/4 = 10.00 Since the two are not equal, we are not at the utility maximization point. (b)If not, what should she do instead? Why? She should append the use of cheese. As she increases the consumption of cheese, the marginal utility from the break unit of money spent on cheese get out decrease from 10. At the same time, she should decrease the consumption of wine.

As she is decreasing the consumption of wine, the marginal utility from the finally unit of money spent on wine go away increase from 5. She should continue doing so till the utility derived from the finis unit of money spent on wine and cheese are equal. 2) In an article about the financial problems of the States Today, Newsweek report that the piece was losing about $20 m illion a year. A Wall Street analyst said th! at the paper should offer its price from 50 cents, which he estimated would bring in an excess $65 million a year. The papers newspaper rejected the idea, saying that circulation could drop sharply by and by a price increase, citing the wall street journals experience after it increased its price to 75 cents.  What surd assumptions are the publisher and the analyst making about price...If you result to get a full essay, order it on our website: OrderCustomPaper.com

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