Consumers in Studentland buy Pizza and Pepsi - nothing else. Prices and quantities are shown in the table below. Spending in 2016 was
A) 720.
B) 1,000.
C) 1,200.
D) 600.
E) 120.

Question

Consumers in Studentland buy Pizza and Pepsi - nothing else. Prices and quantities are shown in the table below.  Spending in 2016 was
A) 720. 
B) 1,000. 
C) 1,200. 
D) 600. 
E) 120.

Quizplus · Accepted Answer

To calculate spending in 2016, we need to multiply the quantity demanded by the price of each item, and then add the two products.

For Pizza: 
Quantity demanded = 200 
Price = $6 per unit 
Total spending on Pizza = 200 x 6 = $1,200

For Pepsi: 
Quantity demanded = 400 
Price = $3 per unit 
Total spending on Pepsi = 400 x 3 = $1,200

Total spending in 2016 = $1,200 + $1,200 = $2,400

Therefore, the correct answer is C, $1,200.

Consumers in Studentland Buy Pizza and Pepsi - Nothing Else