A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a cup o' soup for $1.50 per me
al. her weekly food budget is $60.
a. draw the budget constraint showing thetrade-off between dining hall meals and cups o' soup. assuming that she spends equal amounts on both goods, draw an indifference curve showing the optimum choice. label the optimum as point
a.
a. draw the budget constraint showing thetrade-off between dining hall meals and cups o' soup. assuming that she spends equal amounts on both goods, draw an indifference curve showing the optimum choice. label the optimum as point
a.
2 answers:
Answer:
Since we are not given the amount of utility that each type of food provides, the indifference curve shall equal the budget constraint curve.
If we assume that the optimum choice is located where the student spends equal amounts in dining hall meals and cups o' soups, it will be 5 dining hall meals and 20 cups o' soups.
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Answer:
a) 2,093
b) It will reorder once there are 420 units left (demand during lead-time)
c) 34 days
Explanation:
a) economic order quantity
<u>Where:</u>
D = annual demand = 21,900
S= setup cost = ordering cost = 50
H= Holding Cost = 0.50
EOQ = 2092.844954
b) it takes four days to arrive:
if it sale 420 units per week then:
420 x 4/7 = 240 units are demand during delivery
c) order cycle:
EOQ / Annual Demand
2,093 / 21,900 = 0,09557 x 365 = 34.8333 days
It will order every 34 days (if it orders after 35 days will face shortage)