Solve the problem.
-A company manufactures two products. For $1.00 worth of product A, the company
spends $0.40 on materials, $0.25 on labor, and $0.10 on overhead. For $1.00 worth of
product B, the company spends $0.50 on materials, $0.20 on labor, and $0.10 on overhead.
Let $$\mathbf { a } = \left[ \begin{array} { l }
0.40 \
0.25 \
0.10
\end{array} \right] \text { and } \mathbf { b } = \left[ \begin{array} { l }
0.50 \
0.20 \
0.10
\end{array} \right]$$ Then a and b represent the ʺcosts per dollar of incomeʺ for the two products.
Evaluate 100a + 400b and give an economic interpretation of the result.

Question

Solve the problem.
-A company manufactures two products. For $1.00 worth of product A, the company 
spends $0.40 on materials, $0.25 on labor, and $0.10 on overhead. For $1.00 worth of
product B, the company spends $0.50 on materials, $0.20 on labor, and $0.10 on overhead.
Let $$\mathbf { a } = \left[ \begin{array} { l } 
0.40 \
0.25 \
0.10
\end{array} \right] \text { and } \mathbf { b } = \left[ \begin{array} { l } 
0.50 \
0.20 \
0.10
\end{array} \right]$$ Then a and b represent the ʺcosts per dollar of incomeʺ for the two products.
Evaluate 100a + 400b and give an economic interpretation of the result.

Quizplus · Accepted Answer

The Answer of Solve the problem.
-A company manufactures two products. For $1.00 worth of product A, the company 
spends $0.40 on materials, $0.25 on labor, and $0.10 on overhead. For $1.00 worth of
product B, the company spends $0.50 on materials, $0.20 on labor, and $0.10 on overhead.
Let $$\mathbf { a } = \left[ \begin{array} { l } 
0.40 \
0.25 \
0.10
\end{array} \right] \text { and } \mathbf { b } = \left[ \begin{array} { l } 
0.50 \
0.20 \
0.10
\end{array} \right]$$ Then a and b represent the ʺcosts per dollar of incomeʺ for the two products.
Evaluate 100a + 400b and give an economic interpretation of the result.

Solve the Problem Then a and B Represent the ʺCosts Per Dollar of Worth