Ed's Utility from Vacations (V)and Meals (M)is Given by the Function

question 38

Essay

Ed's utility from vacations (V)and meals (M)is given by the function U(V,M)= V²M.Last year,the price of vacations was $200 and the price of meals was $50.This year,the price of meals rose to $75,the price of vacations remained the same.Both years,Ed had an income of $1500.
a.Calculate the change in consumer surplus from meals resulting from the change in meal prices.
b.What is the compensating variation for the price change in meals?
c.Calculate the equivalent variation for the price change in meals.

Explain the principles and applications of flexible budgets and their relation to fixed and variable costs.

Calculate and interpret return on investment (ROI) for different business scenarios.

Distinguish between controllable and uncontrollable costs in managerial accounting.

Analyze the impact of changes in costs, sales, and assets on ROI.

---

Definitions:

Revenue Account

An account that records the income generated from the sale of goods and services.

Debit Balance

An account balance where total debits exceed total credits.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account, used in double-entry bookkeeping.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account.