Seppo Consumes Brandy and Saunas

question 17

Multiple Choice

Seppo consumes brandy and saunas.Neither is an inferior good.Seppo has a total of $30 a day and 6 hours a day to spend on brandy and saunas.Each brandy costs $2 and takes half an hour to consume.Each sauna costs $1 and takes 1 hour to consume.(It is, unfortunately, impossible to consume a brandy in the sauna.) Seppo suddenly inherits a lot of money and now has $50 a day to spend on brandy and saunas.Since Seppo is a rational consumer, he will

• A)increase brandy consumption only.
• B)increase sauna consumption only.
• C)increase consumption of both.
• D)consume the same amounts of both goods as before.
• E)We can't tell since we are told nothing about his indifference curves.

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Definitions:

Operations Management

The administration of business practices to create the highest level of efficiency possible within an organization, focusing on converting materials and labor into goods and services as effectively as possible.

Material and Human Resources

The tangible resources (like equipment and raw materials) and the workforce needed to carry out organizational operations.

Internal and External Customers

Refers to the individuals or entities within (internal) and outside (external) an organization that receive and are affected by its services or products.

Kaoru Ishikawa

A prominent Japanese organizational theorist and quality management innovator best known for developing the Ishikawa or fishbone diagram as a tool for quality control and problem-solving.