Group Assignment 2 (3)

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University of Mississippi *

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MANAGERIAL

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Economics

Date

Jan 9, 2024

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docx

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2

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Group Assignment #2 Due Sunday, October 15 Problem 1 Consider a female college student with a weekly food budget of $100. Because she lives on campus and does not have transportation, her only two food options are cafeteria meals priced $4.00 per serving, and veggie bowls at an on-campus vender priced $10.00 each. Assume that no other options are available, but these two foods are accessible anytime during the week. 1.1.Present her weekly isocost line, both graphically and mathematically. Discuss what the isocost line tells you. 1.2.Recommended calorie intake for this student is 14,000 kcal per week. The cafeteria meals contain 1000 kcal per serving, and each veggie bowl contains 500 kcal. Present her isonutrient line (in this case 14,000 kcal isocalorie line) graphically and mathematically. 1.3.Put the isocost line and isonutrient line together. What exact combination of cafeteria meals and veggie bowls would exactly meet the calorie recommendation AND the budget? (Fractional units are okay.) Explain. 1.4.If she usually consumes 15 cafeteria meals and 4 veggie bowls per week, what can you say about her choice? What does it tell you about her utility function? 1.5.What are some of the things the university can do to make her healthier choices? [There might be more than one way.] How exactly does it work? Explain your answer within the framework of consumer equilibrium. Problem 2 2.1 If own price elasticity of sugar-sweetened beverages is -0.8 and a soft drink tax increases the price by 5%, soft drink consumption is expected to decrease by what %? If the target reduction in soft drink consumption is 10%, how much must the tax increase the price? 2.2 In 2019, an article on Washington Post ( https://www.washingtonpost.com/opinions/local- opinions/dc-s-proposed-soda-tax-sounds-sweeter-than-it-is/2019/11/01/8305cf44-fa5f-11e9-ac8c- 8eced29ca6ef_story.html?gclid=CjwKCAjwkvWKBhB4EiwA- GHjFu0BzYMkD_pz_9cn_sx1UmC1Gu6rQXnuZ6ToIRdTFh4BVt8qJxWwrBoCT3kQAvD_BwE ) argued that soda taxes are bound to fail. Do you agree? Why or why not? Explain your answer using the concept of elasticities. Individuals should work on the following problems as much as they can before joining the group meeting. Each group is responsible for arranging a time that works for all members to meet on Zoom. Somebody in the group should be the Zoom meeting host and record the meeting. The meetings should start with each person saying their name . Everyone should have the camera turned on for the meeting duration and share their answers to help one another to learn. The Zoom session should be about 15 minutes. Each group submits the Zoom recordings, and individuals submit the papers by the deadline. While the group members may have similar answers, everyone should write their own paper and not copy-and-paste from others. See the syllabus for the grading criteria.
Problem 3 Use Figure 6.3 from Davis & Serrano textbook and show how the slopes and feasible choice set will change for the following scenarios. 3.1 What happens to Figure 6.3 if the time price of food at home T H decreased (e.g., you replace your conventional oven with a convection oven, which cooks faster)? 3.2 What happens to Figure 6.3 if the money price of FAFH P A increased (e.g., your favorite restaurant raised the prices on its menu)? 3.3 What happens to Figure 6.3 if the amount of nutrients in FAFH α 1 A decreased (e.g., saturated fat)?
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