Tyke, Inc Produces Two Products, a and B, Each Requiring Direct

question 36

Multiple Choice

Tyke, Inc. produces two products, A and B, each requiring direct material and labour. Total labour available is 200 hours, and 300 kilograms of material. Each unit of A sells for $10, and B sells for $15. Given the following linear programming information: $$\begin{array} { l l } \text { Maximize: } & \$ 4 \mathrm {~A} + \$ 5 \mathrm { Y } \\\text { Subject to: } & 3 \mathrm {~A} + 1 \mathrm {~B} = 200 \\& 2 \mathrm {~A} + 2 \mathrm {~B} = 300\end{array}$$ What are the variable costs per unit for A and B?

• A) $4 and $15
• B) $14 and $19
• C) $6 and $10
• D) $7 and $14

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Definitions:

Total Utility

The total satisfaction or benefit received by consuming a certain amount of goods or services.

Consumption

The use of goods and services by households, leading to the satisfaction of wants and needs.

Utility

A measure of satisfaction or pleasure that consumers derive from consuming goods or services.

Consumption

The act of using goods and services to satisfy needs and wants, a key concept in economics relating to how goods and services are used.