Augusta, inc., expects manufacturing and sales of 70,000 units of product maggie, its only product, to occur evenly over a 10-week period. augusta pays for materials in the week following use. the balance of accounts payable for materials at the beginning of the 10-week period is $40,000. there are no beginning inventories. the fol­lowing information pertains to product maggie for the 10-week period:
sales price $11 per unit
materials $3 per unit
manufacturing conversion costs—fixed $210,000
variable $2 per unit
selling and administrative costs—fixed $45,000
variable $1 per unit
a special order for 4,000 units would cause a loss of 1,000 regular sales. all cost relationships are unchanged. if the special order is accepted, what minimum amount of revenue must be generated from the special order so that net income is not reduced?
a. $29,000b. $31,000c. $38,000d. $41,000

3. saving two consumers, larry and jeff, have utility functions defined over the two periods of their lives: middle age (period zero) and retirement (period 1). they have the same income in period 0 of m dollars and they will not earn income in period 1. the interest rate they face is r. larry’s and jeff’s utility functions are as follow. = 0.5 + 0.5 and = 0.5 + 0.5 for each person is between zero and one and represents each consumer’s temporal discount econ 340: intermediate microeconomics. ben van kammen: purdue university. rate. a. write the budget constraint that applies to both jeff and larry in terms of consumption in each period and ), interest rate, and m. b. what is larry’s and what is jeff’s marginal rate of intertemporal substitution? c. what is the slope of the budget constraint? d. write each consumer’s condition for lifetime utility maximization. e. re-arrange the conditions from part (d) to solve for the ratio, . f. if > which consumer will save more of his middle age income? g. if > 1 1+ , in which period will larry consume more: = 0 or = 1?