7. A college student has two options for meals: eating at the dining hall for $6 per meal or eating a takeaway snack for

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7 A College Student Has Two Options For Meals Eating At The Dining Hall For 6 Per Meal Or Eating A Takeaway Snack For 1 (36.54 KiB) Viewed 27 times

7. A college student has two options for meals: eating at the dining hall for $6 per meal or eating a takeaway snack for $1.50. His weekly food budget is $60. a. Suppose the price of take-away snacks now rises to $2. Assume that our student now spends only 30 percent of his income on dining hall meals. How many times he will eats dining hall meal and how many times he will eats take a way snack? b. What happened to the quantity of take away snacks consumed as a result of this price change? What does this result say about the income and substitution effects? Explain. 8. Consider total cost and total revenue given in the following table: Quantity Total Cost Total Revenue 0 S8 SO 8 2 10 16 11 24 13 32 19 40 27 48 37 56 1 9 3 4 S 6 7 a. Calculate profit for each quantity. b. How much (give exact number) should the firm produce to maximize profit? And why?