suppose you want to retire in 40 years. how much should you deposit now in an ira that pays 12ompounded monthly to have $1,500,000 in 40 years? round up to the nearest dollar.
Answers
You would need to deposit $12,581.31 now in an IRA that pays 12% compounded monthly to have $1,500,000 in 40 years.
To calculate the amount you need to deposit now in an IRA that pays 12% compounded monthly to have $1,500,000 in 40 years, you can use the present value formula. The present value formula allows you to calculate the amount you need to invest today to reach a certain future value.
In this case, the present value formula is:
PV = FV / (1 + r)^n
Where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.
Substituting the values in the formula, we get:
PV = 1500000 / (1 + 0.01)^480
PV = $12,581.31
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Related Questions
Workplace diversity describes differences among workers in any of the following areas:
attitude
education
ethnicity
industry
Answers
Answer:
industry because here based the all the business in whole world
If the gross rating points of a popular talk show are 89 and the reach is 56, what is the frequency at which the viewers will watch advertisements that air during the show?
A.
1.4
B.
1.7
C.
1.5
D.
1.8
E.
1.9
Answers
If the gross rating points of a popular talk show are 89 and the reach is 56, the frequency at which the viewers will watch advertisements that air during the show will be 1.5.
In traditional ad buying, the gross rating point (GRP) is a standard metric for gauging the effectiveness of a particular advertising campaign. The number of times a target audience sees the advertisement is multiplied by the proportion of impressions that represent that audience in GRPs.
Reach (%) + GRPs (%) + Average frequency (#) = GRPs (%) Two instances: A campaign has 12 x 5 = 60 GRPs if, on average, 12% of viewers watch each episode of a television show, and an advertisement is put on 5 of those episodes.
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what helped american industry grow in the second half of the nineteenth century? group of answer choices transportation and natural resources fungable resources managed via corporate trusts capitalism, explotation, robber barons, and the labor relations board transportation systems, natural resources, immigration, and business leaders
Answers
Industry profited from a favorable administration, new sources of electricity, the growth of the nation, and the enhancement of industrial expansion.
The massive expansion of its industrial plant and output in the late 19th century is likely what makes the United States most famous. The mass manufacturing of commodities by machines was the driving force behind these enormous gains. British textile makers invented and refined this technology initially.Since such industrialization had started a century earlier, machines had taken the position of highly skilled artisans in industry after industry. By the 1870s, machines were cutting and stitching leather for shoes, knitting stockings, sewing shirts and skirts, and mass-producing nails. Such devices decreased production costs and manufacturers' pricing to customers by lowering labor expenditures. In other words, the availability of goods at lower prices increased as a result of machine manufacturing.To know more about machine manufacturing visit:
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A doctrine under which a seller may be excused from performing a contract when (1) a contingency occurs, (2) the contingency's occurrence makes performance impracticable, and (3) the nonoccurrence of the contingency was a basic assumption on which the contract was made. Despite the fact that UCC 2-615 expressly frees only sellers under this doctrine, courts have not distinguished between buyers and sellers in applying it.
Answers
A doctrine under which a seller may be excused from performing a contract when (1) a contingency occurs, (2) the contingency's occurrence makes performance impracticable, and (3) the nonoccurrence of the contingency was a basic assumption on which the contract was made is known as the Impossibility of Performance.
What is the Doctrine of Impossibility of Performance?
The Doctrine of Impossibility of Performance is a legal concept that is used to excuse the performance of an obligation under certain conditions. This doctrine asserts that a party to a contract may be excused from performing if it is rendered impossible by a supervening event or change in circumstances beyond the party's control.
Under the doctrine of impossibility, the non-occurrence of the contingency was a basic assumption on which the contract was made. Therefore, both buyers and sellers are covered under this doctrine. When a contingency happens, the occurrence of which renders it impossible to fulfil the terms of the contract, the party who is unable to meet the requirements of the agreement can be excused from fulfilling it.
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Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the year 2015, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 10 million pages. For 2015, Xylon decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis: Cost pool Manufacturing overhead costs Activity level Design changes $ 120,000 200 design changes Setups 640,000 4,000 setups Inspections 80,000 16,000 inspections Total manufacturing overhead costs $840,000 During 2015, two customers, Money Managers and Hospital Systems, are expected to use the following printing services: Activity Money Managers Hospital Systems Pages 60,000 76,000 Design changes 10 2 Setups 20 10 Inspections 38 30 11) If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate? Under ABC costing, what is the inspection cost allocated to Money Managers?
Answers
Answer:
the cost per overhead rate and the inspection cost allocation is $0.08 per page and $190 respectively
Explanation:
The computation is shown below;
The cost per overhead rate is
= $840,000 ÷ 10,000,000
= $0.08 per page
The inspection cost allocated to Money Managers is
= $80,000 ÷ 16,000 × $38
= $190
hence, the cost per overhead rate and the inspection cost allocation is $0.08 per page and $190 respectively
The same would be considered and relevant too
during the 1980's, the price of one share of Johnson and Johnson stock rose from $17 1/4 to $56 1/8. how much money would you have made if you bought 100 shares of Johnson & Johnson stock in 1980 and sold it in 1989?
Answers
Given:
Price of one share in 1980 = $\(17\dfrac14\)
Price of one share in 1989 = $\(56\dfrac18\).
To find:
How much money would you have made if you bought 100 shares of Johnson & Johnson stock in 1980 and sold it in 1989?
Explanation:
Using the given information,
Change in the value of each share = \(56\dfrac18-17\dfrac14\)
= \(\dfrac{448+1}{8}-\dfrac\dfrac{68+1}{4}\)
= \(\dfrac{449}{8}-\dfrac\dfrac{69}{4}\)
= \(\dfrac{449-138}{8}\)
= \(\dfrac{311}{8}\)
Value of one share increased by $\(\dfrac{311}{8}\).
Value of 100 shares increased by = \(100\times \dfrac{311}{8}\)
= \(\dfrac{31100}{8}\)
= \(\dfrac{7775}{2}\)
= \(3887.5\)
Therefore, you would have made $3887.5 if you bought 100 shares of Johnson & Johnson stock in 1980 and sold it in 1989.
Craig was scheduled to attend a meeting about a new project, but the flu kept him at home. What can Craig do to catch up on the outcome of the meeting once he has recovered?
Answers
Answer:
Read the minutes from the meeting
Explanation:
At every formal meeting, there someone assigned to take minutes of the proceedings. The minutes detail the discussion and resolutions made at the meeting.
Once Craig has recovered, he should make efforts to get a copy of the minutes. By reading the minutes, Craig will be up to speed with the outcome of the meetings.
Summarize the Student loan forgiveness-experts on banking, public spending and education policy look at the impact of Baden’s plan article in 1-2 paragraphs.
Answers
Experts have debated Baden's student loan forgiveness plan, with some highlighting its potential economic benefits while others express concerns over cost and long-term implications.
Experts in banking, public spending, and education policy have examined the impact of Baden's student loan forgiveness plan. The plan proposes a comprehensive approach to addressing the burden of student loans, aiming to alleviate the financial strain on borrowers. These experts have analyzed the potential consequences of the proposal. Some argue that widespread student loan forgiveness could lead to a significant boost in consumer spending, stimulating economic growth and aiding in wealth redistribution.
Additionally, they highlight the potential benefits of reducing the financial stress on individuals, allowing them to invest in their futures and contribute to the economy in other ways. However, critics express concerns over the cost of such a program and its potential impact on the lending industry and taxpayers. They emphasize the need for careful consideration of the long-term economic implications and the necessity to balance debt relief with other educational reforms to address the root causes of the student loan crisis.
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Can someone help me ?
Answers
Answer:
Explanation:
most like to live in : north korea
why ? i would would most like to live here because of the culture and food and the many places to see also because i've always wanted to see the different animals there and compare them from the ones where i'm from .
least like to live in : new zealand
because there winters are a negative -10c and im not for cold weather which is why i would rather not live in this area , but i do like the vast amount of mountains in the area they are beautiful.
the adjustment for underapplied overhead
Answers
Answer: The adjustment for underapplied overhead increases cost of goods sold and decreases net operating income.
My boss really does not understand the technical aspects of the job my group is trying to complete. I understand the intricacies of the project, and my team members come to me with all of their questions. What has happened in this work setting
Answers
I have emerged as the team leader
which of the following exceptions allows employers to monitor employee communications, provided employees have given their consent?
a. business- purpose excepation
b. business excepation
c. consent excepation
d. codetermination
Answers
The exception that allows employers to monitor employee communications, provided employees have given their consent, is the "consent exception."
The correct answer is option c, the "consent exception." The consent exception allows employers to monitor employee communications when employees have given their explicit consent or agreement to such monitoring. This means that employees are aware of and have given their permission for their communications to be monitored by the employer.
Under the consent exception, employers must ensure that employees fully understand the scope and purpose of the monitoring. They should obtain clear and informed consent from employees, typically through written consent forms or agreements. This consent may cover various forms of communication, including email, telephone calls, instant messaging, and internet usage.
By obtaining consent, employers are able to monitor employee communications for legitimate business reasons, such as maintaining security, preventing misuse of company resources, ensuring compliance with company policies, and protecting confidential information.
It is important to note that the specific requirements and regulations surrounding employee monitoring may vary between jurisdictions. Employers should adhere to applicable laws and regulations related to employee privacy and data protection to ensure compliance and protect the rights of employees.
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alright, anyone got any chocalate
Answers
Answer:
No, I don't really like chocolate.
Explanation:
Answer:
Yes.
Explanation:
But sadly I can't give them away.
#teamtrees #WAP (Water And Plant)
Explain one advantage for RDM of implementing a project-based organizational structure.
Answers
One advantage of implementing a project-based organizational structure for Research Data Management (RDM) is increased flexibility and adaptability to changing needs and priorities.
With a project-based structure, RDM teams can easily adjust their focus and resources to meet the specific requirements of each project, as well as to accommodate changes in funding, research goals, or other circumstances.
In a project-based structure, teams are organized around specific projects or initiatives, with clear objectives, timelines, and milestones. This allows RDM teams to work more efficiently and effectively, with a shared sense of purpose and direction.
It also enables them to collaborate more closely with other stakeholders, such as researchers, funders, and IT professionals, to ensure that data management practices are aligned with broader research goals and priorities.
Another advantage of a project-based structure is that it fosters innovation and creativity by allowing RDM teams to experiment with new ideas, tools, and technologies in a controlled and focused environment.
This can lead to new insights, solutions, and best practices that can be shared across projects and organizations, ultimately benefiting the wider research community.
Overall, a project-based organizational structure offers several advantages for RDM, including increased flexibility, adaptability, collaboration, innovation, and alignment with broader research goals and priorities.
By leveraging these benefits, RDM teams can deliver high-quality data management services that support the needs of researchers, funders, and other stakeholders, while advancing the state of the art in research data management.
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If real GDP is $150 billion, full employment GDP is $600 billion, and the marginal propensity to consume is 0.8, then Congress should
Answers
Answer:
increase government spending by $90 billion
Explanation:
in order to reach full employment GDP level, the government should increase its spending by $90 billion. Total GDP increase = increase in government spending / government multiplier = $90 billion / (1 - 0.8) = $90 billion / 5 = $450 billion.
GDP will increase from $150 billion + $450 billion = $600 billion
Help Here People FAST :) Anyone Answers will Become BRAINIEST
EXPLAIN 5 degrees of elasticity with Diagram :)
Answers
Answer:
The concept of price elasticity of demand has been defined by different economies as under:
“Elasticity of demand may be defined as the percentage change in quantity demanded to the percentage change in-price.”
ADVERTISEMENTS:
“Elasticity of demand is the ratio of relative change in quantity to relative change in Price.”
“ The elasticity of demand for a commodity is the rate at which quantity bought change the price change.”
“The elasticity of demand is a measure of the relative change in quantity to a relative change in price”.
“Elasticity of demand measures the responsiveness of demand to changes in price”.
Explanation:
Using the following balance sheet items and amounts, calculate the total liquid assets and total current liabilities.Money market account $3,450 Medical bills $398Mortgage $154,000 Checking account $950Retirement account $94,200 Credit card balance $659
Answers
Given the following balance sheet items and amounts, the total liquid assets and total current liabilities are to be calculated:
Money market account $3,450
Medical bills $398
Mortgage $154,000
Checking account $950
Retirement account $94,200
Credit card balance $659
Calculation of liquid assets: Since liquid assets are those that are easily convertible to cash, we can determine the total liquid assets by adding the checking account balance and money market account balance.
So,Total liquid assets= $3,450 + $950= $4,400
Calculation of current liabilities: Current liabilities are those that are expected to be settled in cash within the next year. The given medical bills and credit card balance are current liabilities.
Total current liabilities = $398 + $659= $1,057
Thus, the total liquid assets and total current liabilities are $4,400 and $1,057, respectively.
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17. Lewis signed a contract for the rights to all timber located on Nine Mile Mine. He agreed to pay $70 per thousand board feet ($70/mbf). As he began work, Nine Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him to enter the land. Lewis sued. Nine Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf, and Lewis had no evidence to contradict Nine Mile. The evidence about market value proved decisive. What is the issue
Answers
The lack of competition is part of the free enterprise system.
O True
O False
Answers
Answer:
I think its true
Explanation:
ESTIMATING COSTS
ACTIVITY 1- Scenario: Margaret has recently opened up her own
Beauty Salon in Abu Dhabi. She has been operating for the last 6
months as a sole trader.
List Margaret's costs for her business below:
Fast plz
Answers
Answer:
Opening your own hair salon is a milestone for any hairdresser. You may be wanting to open a salon so that you are self-employed. You may also be wanting to provide your own clients with services that align with your vision of what a hairdressing experience should be. However, opening a hairdressing salon is a big responsibility, even if you have previous experience in the hairdressing industry.
One of the most important things you will need to consider when planning to open a hairdressing salon is how to structure your business. Your business structure is the legal framework of your business. It has the potential to reduce your exposure to financial risk and enable flexibility for growth. The wrong business structure for a new business may be costly and may not be suited to your business goals. This article considers four popular business structures and their suitability for hairdressing businesses.
1. Sole Trader
If you are starting a hairdressing salon on your own or are wanting to freelance, you may choose to operate as a sole trader. As a sole trader, you will have full control and autonomy of the running your business. This structure is usually relatively easy and cheap to set up. It also has minimal legal formalities.
To set up as a sole trader, you will need an Australian Business Number (ABN). If you intend to trade under your own name, then you don’t need to register a business name. However, if you plan to operate under a different name, you simply need to register a business name with the Australian Securities and Investments Commission (ASIC).
Although it has an easy setup, this structure does come with risk. If any of your clients sue you or you incur any debts, you will be personally responsible. This means that if you can not repay these debts from the funds of the business, you will have the repay the debt from your own personal finances.
Also, as a sole trader, you have limited resources available to fund the growth of your business. You will need to rely on:
personal savings;
loans; and
business profits.
You cannot raise funds from the general public. Being a sole trader may also not be the most tax-effective decision. This is because a sole trader is liable to the same tax rate applicable to individual taxpayers on income earned. You should check this with an accountant or tax lawyer.
2. Partnership
If you plan to open your hairdressing salon with one or more business partners, you may choose to enter into a partnership. Similar to a sole trader, the setup is simple and has minimal upfront costs. You will require an ABN for the partnership and most partnerships also register a business name.
It is also important for the partners to enter into a partnership agreement. This agreement governs the relationship between partners and sets out key terms, which may describe:
how the business will be managed;
how the profits will be shared;
who will fund the partnership;
how you or your partners can sell your share in the business; and
the process for managing disputes.
However, setting up a partnership also comes with risks. Like a sole trader, if someone sues you or you go into debt, your personal assets and finances will be at risk.
Additionally, partnerships involve joint liability. Therefore, you may be personally liable for business debts owed by any of the other partners. The amount owed is not divided proportionally according to your percentage of ownership in the business, so you could be responsible for paying the entire amount.
Like a sole trader, you cannot raise funds from the general public to fund the growth of your business. You will need to rely on:
the savings of each partner;
loans; or
business profits.
However, unlike a sole trader, you can look to bring on more partners to increase the pool of funds available for the business.
3. Company
Whether you are operating your hairdressing salon on your own or with other business partners, you may decide to operate as a company. A company is a separate legal entity. This means it is capable of suing and being sued. It also holds assets in its own name and can enter into contracts in its own name.
There are two key players involved in the management of a company. These are shareholders and directors. As the founder of your business, you will usually be both a shareholder and a director of the company that you establish. Any other business partners may also take on these roles.
hope it helps
Benjamin Company
Benjamin Company produces two products from a joint process: X and Z. Joint processing costs for this production cycle are $8,000.
Yards Sales price
per yard at
split-off Disposal
cost per yard at
split-off Further
processing
per yard Final sale
price per
yard
X 1,500 $6.00 $3.50 $1.00 $7.50
Z 2,200 9.00 5.00 3.00 11.25
If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Benjamin Company. Using sales value at split-off, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar)?
Select one:
a. $4,757
b. $4,000
c. $5,500
d. $2,500
Answers
The sales value at split-off, the amount of joint processing cost allocated to Product Z is $5,436 . The correct answer is option c. $5,500 is the closest answer choice.
To begin, we need to calculate the total sales value at split-off for both products:
Total sales value at split-off = (X yards * X sales price at split-off) + (Z yards * Z sales price at split-off)
Total sales value at split-off = (1,500 * $6.00) + (2,200 * $9.00)
Total sales value at split-off = $29,100
Joint processing cost allocated to Z = Relative sales value for Z * Total joint processing cost
Joint processing cost allocated to Z = 0.6795 * $8,000
Joint processing cost allocated to Z = $5,436.00
This method allocates joint processing costs to the individual products based on their relative sales values at the split-off point.
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Focus groups should be comprised of how many people? Three to five people Six to eight people Eight to 12 people 10 to 12 people
Answers
Answer:
3-5 people
Explanation:
It's called a focus group for a reason. If there were 8-12, or 10-12 people, the others might not be able to focus. But there are people who need others to focus, so 3-5 would be a perfect number per group.
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assume that you are considering the purchase of a stock which will pay dividends of $2.7 during the next year. further assume that you will be able to sell the stock for $71 one year from today and that your required rate of return is 18 percent. how much would you be willing to pay for the stock today? (round your answer to two decimal places, such as 12.34).
Answers
The amount an investor is willing to pay for a stock today can be calculated using the dividend discount model (DDM). The dividend discount model (DDM) values a stock based on the net present value of its future dividends. the investor would be willing to pay $75.17 for the stock today, given the assumptions provided.
In this case, the dividends paid in the next year and the price of the stock in the future are used to calculate the value of the stock today. Here's how to calculate the amount an investor would be willing to pay for the stock today:
The formula for calculating the intrinsic value of a stock using the dividend discount model is as follows:
P₀ = D₁/(r - g)
Where:
P₀ = the current price of the stock
D₁ = the expected dividend payment in the next year
r = the required rate of return
g = the expected growth rate of dividends
Substituting the given values, we get:
P₀ = $2.7/(0.18 - 0) + $71/(1.18)
P₀ = $2.7/0.18 + $60.17
P₀ = $15 + $60.17
P₀ = $75.17
Therefore, the investor would be willing to pay $75.17 for the stock today, given the assumptions provided.
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Why is it very important to verify you are sending a p2p payment to the right person before actually sending it?.
Answers
It is very important to verify you are sending a p2p payment to the right person before actually sending it because sent payments are final; you will need to ask for it back from the person you sent it to accidentally.
Manner of fee manner banknotes and coins (cash), and deposits and credit on an account with an economic organization or a comparable institution that may be operated via price instruments.
Credit playing cards, debit cards, cheques, money transfers, and ordinary coins or ACH (automatic Clearing house) disbursements are all electronic payment strategies. digital charge technologies include magnetic stripe cards, clever playing cards, contactless playing cards, and mobile payments.
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Additional paid-in capital 200 0 retained earnings 1,080 480 what amount will be reported for consolidated equipment (net)?
Answers
The amount reported for consolidated equipment (net) cannot be determined based on the given information. The question only provides the values for additional paid-in capital and retained earnings, which are not directly related to the equipment account.
To determine the amount reported for consolidated equipment (net), we would need additional information such as the cost of the equipment, accumulated depreciation, and any impairments or disposals.
The consolidated equipment (net) value is usually calculated by subtracting the accumulated depreciation and any impairments or disposals from the original cost of the equipment. This will give us the net value of the equipment.
Without the necessary information, it is not possible to determine the amount reported for consolidated equipment (net).
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when the federal reserve announces that it is increasing the federal funds rate, it is actually going to . select an answer and submit. for keyboard navigation, use the up/down arrow keys to select an answer. a require that banks pay higher interest rates to each other. b change the law on the federal funds rate. c buy bonds in the open market until the federal funds rate rises to the new target d sell bonds in the open market until the federal funds rate rises to the new target
Answers
The correct option is:- A - require that banks pay higher interest rates to each other.
When the Federal Reserve announces that it is increasing the federal funds rate, it means that it is raising the interest rate that banks charge each other for overnight loans. This decision is made by the Federal Open Market Committee (FOMC) and is intended to slow down inflation by making it more expensive for banks to borrow money, thereby reducing the amount of money in circulation.
The Federal Reserve increases the federal funds rate by conducting open market operations, specifically selling bonds in the open market. By doing this, they reduce the amount of excess reserves that banks hold, which in turn raises the cost of borrowing among banks. As a result, the federal funds rate increases to the new target.
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Purchasing goods and services for business purposes can alternatively be referred to as _______. group of answer choices retail buying service buying commercial selling commercial buying
Answers
Purchasing goods and services for business purposes can alternatively be referred to as commercial buying.
Commercial buying involves the acquisition of goods and services by businesses to support their operations. This can include purchasing raw materials, equipment, office supplies, or even outsourcing services like accounting or IT support.
1. Commercial buying refers to the process of businesses procuring goods and services to meet their specific needs.
2. It is different from retail buying, which involves the purchase of goods by individuals for personal use.
3. Commercial buying can involve large quantities of goods and services, as businesses often require items in bulk to maintain their operations.
4. The process of commercial buying usually involves evaluating different suppliers, negotiating prices, and considering factors like quality, reliability, and cost-effectiveness.
5. For example, let's say a restaurant needs to purchase fresh produce for its menu. The restaurant owner would engage in commercial buying by sourcing fruits and vegetables from a supplier that offers high-quality produce at competitive prices.
In summary, purchasing goods and services for business purposes is known as commercial buying. This term encompasses the various steps and considerations involved in acquiring the necessary resources for a business to operate efficiently.
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which of the following statements regarding central banks is true? a.) a central bank has the sole authority with respect to the money supply. b.) a central bank controls the state and local bank locations and number of branches. c.) central banks require greater reliance on the gold standard. d.) central banks undermine international trade.
Answers
The statement regarding central banks which is true is that: A.) a central bank has the sole authority with respect to the money supply.
What is money?In Economics, money can be defined as any formally recognized economic unit that is universally accepted as a medium of exchange for goods and services, as well as repayment of debts such as taxes, levies, fees, and loans, across the world.
Generally speaking, the central bank of any country is sometimes referred to as an ap-ex bank and it is typically saddled with the responsibility of regulating money supply and interest rates within the country.
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Mary owns a risky stock and anticipates earning 16. 5 percent on her investment in that stock. Which one of the following best describes the 16. 5 percent rate?.
Answers
one of the following best describes the 16. 5 percent rate Expected return.
The anticipated go-back is the number of earnings or losses an investor can anticipate receiving on an investment. A predicted go-back is calculated by way of multiplying ability outcomes by way of the chances of them going on and then totaling these effects.
Expected returns can't be assured. anticipated return fashions are widely used in Finance research. within the context of occasion research, expected-to-go-back models predict hypothetical returns which can be then deducted from the real stock returns to reach 'odd returns. The expected return is an essential monetary idea traders use while figuring out wherein to make investments in their finances. Calculating the anticipated return of a selected investment or portfolio allows you to count on the profit or loss on that funding primarily based on its ancient overall performance.
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Lisa consumes only pizzas and burritos. In equilibrium, her marginal utility of pizza is 20 and her marginal utility of a burrito is 10. The price of a pizza is $4. What is the price of a burrito?
Answers
Based on Lisa's marginal utility values and the fact that she is in equilibrium, we can use the principle of diminishing marginal utility to determine the price of a burrito. The principle states that as we consume more of a good, the additional satisfaction we get from each unit decreases.
Since Lisa's marginal utility of pizza is twice as high as her marginal utility of a burrito, we can assume that she consumes two burritos for every pizza. Therefore, the total utility Lisa receives from one pizza and two burritos is 40 (20 from pizza + 2*10 from burritos).
If we assume the price of a burrito is x, then the total cost of one pizza and two burritos is 4 + 2x. In equilibrium, Lisa will continue to consume pizzas and burritos until the marginal utility per dollar spent is the same for both goods.
Thus, we can set up the equation 20/4 = 10/x, and solve for x, which gives us a price of $2 for a burrito. Therefore, Lisa is willing to pay $4 for a pizza and $2 for a burrito to achieve equilibrium and maximize her total utility.
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