(7 points) Suppose Backbeat BBQ, Dave Grohl's one-man catering company, offers two types of membershipplans. Plan A has an entry fee of $20 with a price of $2 per unit. Plan B has an entry fee of $40 with a price of $1per unit for using the service. Let x be expenditure on all other goods and y be the units of consumption ofBackbeat BBQ's services, and suppose you have an income of $100.A. Write down the budget equation that you would have after you paid the entry fee for each of the two plans.B. If your utility function is xy, how much y would you choose in each case?C. Which plan would you prefer? Explain.

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Answered: (7 points) Suppose Backbeat BBQ, Dave…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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17 - Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $2.00 and the price of a banana is $1.00. If the consumer spent all of her budget on just apples or just bananas, how many apples or bananas maximum would she be able to buy?
Title Suppose that Lynn enjoys coconut oil in her coffee. She has very particular preferences, and she mus Description Suppose that Lynn enjoys coconut oil in her coffee. She has very particular preferences, and she must have exactly two spoonfuls of coconut oil for each cup of coffee. Let C be the number of cups of coffee, and O be the number of spoonfuls of coconut oil. Also, let PC be the price of a cup of coffee. Suppose Lynn has $12 to spend on coffee and coconut oil. Also, the price of coconut oil is $.50 per spoonful.a) Graph Lynnâs Price Consumption Curve for prices, PC = $1, PC = $2, and PC = $3. Please put the number of cups of coffee on the horizontal axis, and the number of spoonfuls of coconut oil on the vertical axis. Be sure to label your graph carefully and accurately.b) Graph Lynnâs demand curve for coffee. You may assume that both coconut oil and coffee are continuous variables so she can consume any amount of coffee and coconut oil that she could afford.…
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True/False 1. it is necessary assumption and economics that consumers prefer higher quantities a good to lower quantities of that good for all goods
11) Suppose that it is observed that the price of a commodity rises and that the quantity sold falls. From this we can deduce A) that the demand curve has shifted to the left, but we cannot deduce whether or not the supply curve has shifted. B) that the demand curve has shifted to the right, but we cannot deduce whether or not the supply curve has shifted. C) that the supply curve has shifted to the right, but we cannot deduce whether or not the demand curve has shifted. D) that the supply curve has shifted to the left, but we cannot deduce whether or not the demand curve has shifted
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1. A consumer consumes two kinds of goods, namely X and Y. The total satisfaction (TU) obtained in consuming both kinds of goods is shown in the equation; (Unit of money in thousands of dollars).TU = 10X + 24Y - 0.5X2 - 0.5Y2TU is the total satisfaction in consuming goods X and YX is the number of items X consumedY is the number of items Y consumedThe price of item X is known to be $ 2, the price of item Y is $ 6 and the budget available to buy item X and item Y is $ 44.Question:a. Determine how many goods X and the number of goods Y must be consumed so that the consumer gets maximum total satisfaction. Determine the total satisfaction that can be obtained from consuming item X and item Y.b. If the price of item X drops from $ 2 to $ 1, determine the quantity of item X and the number of items Y must consume to obtain maximum total satisfaction. Determine the total satisfaction that can be obtained from the consumption of item X and item Y. 2. A producer has a total cost function: TC =…
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Exercise 1: Identifying the determinants of demand. In worksheet 5B, you have seen have how an increase in demand is depicted on a graph by a shift in the demand curve. • When the demand curve shifts upward and to the right, this is indicative of an increase in demand. • When the demand curve shifts to the left, this is indicative of a decrease in demand. • Factors that result in a change in demand are the determinants of demand. Working as a part of a team of three or four, complete the table below. For each determinant of demand: • indicate whether demand will increase or decrease; • provide an explanation as to why.

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