For Every Two Boxes of Strawberries That She Consumes, Millicent

question 16

Multiple Choice

For every two boxes of strawberries that she consumes, Millicent insists on having one pitcher of cream.She does not, however, insist on consuming the same amount every week.Her utility functions is U =min{s₁, 2c₁}min{s₂, 2c₂}, where s₁ and s₂ are the number of boxes of strawberries she consumes this week and next week and c₁ and c₂ are the number of pitchers of cream she consumes this week and next.Strawberries cost $2 a box and cream costs $1 a pitcher.She has a present value of $100 to spend on these goods in the next two weeks.The weekly interest rate is 1%.How many boxes of strawberries will she consume this week?

• A)10
• B)20
• C)22
• D)14.1
• E)6.06

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Definitions:

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices.

Output Per Hour

A measure of productivity calculated by dividing the total output of goods and services by the total hours worked.

Marginal Productivity

The additional output that is produced by adding one more unit of a particular input while holding all other inputs constant.

Complements In Production

Goods that are produced together or their production levels are directly linked; an increase in the production of one leads to an increase in the production of the other.