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Bianca Purchases Coffee (C), Bagels (B) and Juice (J)

question 26

Essay

Bianca purchases coffee (C), bagels (B) and juice (J). At her current levels of consumption, her MUC = 10, MUB = 15, and MUJ = 20. The price of coffee is $2, the price of bagels is $3, and the price of juice is $4. Is Bianca maximizing her utility? If so, why? If not, what must she do to move her consumption toward equilibrium?


Definitions:

Direct Labor Time Variance

The difference between the actual time taken to produce a good or service and the expected time, multiplied by the standard labor rate.

Direct Materials Quantity Variance

A measure of the difference between the actual quantity of materials used in production and the standard expected quantity.

Direct Labor Time Variance

The difference between the actual time taken to manufacture a product and the standard time expected, multiplied by the wage rate.

Direct Labor Time Variance

The difference between the estimated time for production and the actual time taken, multiplied by the wage rate.

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