Lilly Davis has $5 per week to spend on any combination of ice cream and candy.The price of an ice cream cone is $2 and the price of a candy bar is $1.The table below shows Lilly's utility values.Use the table to answer the questions that follow the table.
a.Complete the table by filling in the blank spaces.
b.Suppose Lilly purchases 2 ice cream cones and 1 candy bar.Is she consuming the optimal consumption bundle? If so, explain why.If not, what combination should she buy and why?
Definitions:
Direct Labor
The labor costs directly tied to the production of goods or services, including wages for workers who physically manufacture a product.
Raw Material
Fundamental materials in their original, altered, or partially processed forms that serve as inputs for manufacturing.
Selling and Administrative Expenses
Costs associated with selling products or services and managing the business, excluding production costs.
Fixed Overhead
Ongoing, recurring costs associated with operating a business that do not vary with production level or sales volume.
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