do some quick math to compare how much alana should be making per month and to compare it to how much she’s spending to determine why alana’s concerned.

Question Completion:

Alana earns $150 per week.  She spends a total of $524 per month.  She plans to save $200 per month.  Out of her total spending, her real needs are as follows:

Car Insurance - $70

Gas for Car - $70

Cell phone - $50

Shoes - $60

Wants:

Coffee - $40

Movies - $36

The remainder of her expenses is on frivolities (called miscellaneous expenses).

1. Alana should be making $600 ($150 * 4) per month.

2. Alana is not spending $76 ($600 - $524) per month.

3. She is concerned because she is not meeting her savings goal of $200 per month.  If she concentrates her expenses per month on her needs and wants only, she will be spending only $326.  This will enable her to save $274 per month, thereby exceeding her target.

Explanation:

a) Data and Calculations:

Car Insurance =     $70

Gas for Car =         $70

Cell phone =         $50

Shoes =                 $60

Wants:

Coffee =                $40

Movies =               $36

Total expenses $326

answer; is usually (less than) the socially optimal level of consumption;