Lilly Davis Has $5 Per Week to Spend on Any

question 278

Essay

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.
$\begin{array}{|c|c|c|c|c|c|c|}\hline \begin{array}{c}\text { Quantity } \\\text { of Ice } \\\text { Cream } \\\text { Cones }\end{array} & \begin{array}{c}\text { Total } \\\text { Utility }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Utility }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Utility per } \\\text { Dollar }\end{array} & \begin{array}{c}\text { Quantity } \\\text { of Candy }\end{array} & \begin{array}{c}\text { Total } \\\text { Utility }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Utility }\end{array} \\\hline 1 & 20 & & & 1 & 20 & \\\hline 2 & 38 & & & 2 & 38 & \\\hline 3 & 52 & & & 3 & 48 & \\\hline 4 & 62 & & & 4 & 54 & \\\hline\end{array}$
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?

Analyze accounts payable and receivable management in the context of cash flow.

Understand the role of depreciation in financial planning and its effect on net income.

Analyze the impact of operating expenses on profitability.

Develop competency in preparing components of a master budget including sales, production, direct materials, direct labor, and overhead.

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Definitions:

Zero Economic Profits

A condition where a firm covers all its opportunity costs perfectly, making no extra returns above these costs.

ATC Curves

Graphical representations showing the average total cost of production at different levels of output.

Demand Curve

A graph that illustrates the relationship between the price of a good or service and the quantity demanded by consumers at various prices, typically sloping downward from left to right.

Cost Functions

Mathematical relationships that express how a firm’s costs depend on the quantity of output it produces.