Question

Each week you purchase 4 units of good A, 5 units of good B, and 6 units of good C.

In week 1 the prices of the three goods (in A, B, C order) were ($2, $3, $4).
In week 2 the prices of the three goods were ($2.05, $2.90, $4.20).
The cost of buying the basket of goods in week 1 was $ _____
The cost of buying the basket of goods in week 2 was $ _____
The percentage change in the cost of the basket of goods was ____%.
Round to two decimal places.

When a firm produces another unit of output the total benefit increases from $1,000 to $1,110 and the total cost rises from $700 to $790. The marginal benefit of producing this unit is $_____ and the marginal cost of producing this unit is $____. Enter whole numbers with no other characters.

Answer 1

The cost of the basket of goods in week 1 was $47 and in week 2 was $47.90. The percentage change in cost of the basket of goods was 1.91%. The marginal benefit and marginal cost of producing another unit of output are $110 and $90, respectively.

Step-by-step explanation:

To calculate the cost of buying the basket of goods each week, you multiply the quantity of each good by its respective price and add up the totals for each good.

In week 1, the cost of the basket of goods is: (4 units of A × $2/unit) + (5 units of B × $3/unit) + (6 units of C × $4/unit) = $8 + $15 + $24 = $47. In week 2, the prices have changed; hence, the cost is: (4 units of A × $2.05/unit) + (5 units of B × $2.90/unit) + (6 units of C × $4.20/unit) = $8.20 + $14.50 + $25.20 = $47.90. To find the percentage change in the cost, we use the formula: ((Cost in week 2 - Cost in week 1) / Cost in week 1) × 100%. Plugging in the numbers, we get: (($47.90 - $47.00) / $47.00) × 100% = 1.91%.

When it comes to the production side, the marginal benefit of producing another unit is the increase in total benefit from that production, which would be $1,110 - $1,000 = $110. The marginal cost of producing that unit is the increase in total cost, which would be $790 - $700 = $90