Figure 4-1Priceof lcecreamcones$4.00$3.50$3.00$2.50DemandQuantity of ice cream conesFigure 4-1 shows Kendra's demand curve for ice-cream cones.Refer to Figure 4-1. What is the total amount that Kendra is willing to pay for 2 ice cream cones?O$1.50O$3.00O$5.50O$6.50

A rational consumer will consume the commodities when they get utility equals to their money utility…

Answered: cones $4.00 $3.50 $3.00 $2.50 Demand…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 13RQ: What does a downward-sloping demand curve mean about how buyers in a market will react to a higher...

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Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.
The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called closing the Washington Monument. When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is So misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with tile highest marginal utility or line lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or line lowest marginal utility?
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of 2 in gasoline money. He has a total of 10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremys consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.
What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
As a college student you work at a part-time job, but your parents also send you a monthly allowance. Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?
. It is a hot day, and Bert is thirsty. Here is the value heplaces on each bottle of water:Value of first bottle $7Value of second bottle $5Value of third bottle $3Value of fourth bottle $1a. From this information, derive Bert’s demandschedule. Graph his demand curve for bottledwater.b. If the price of a bottle of water is $4, how manybottles does Bert buy? How much consumersurplus does Bert get from his purchases? ShowBert’s consumer surplus in your graph.c. If the price falls to $2, how does quantitydemanded change? How does Bert’s consumersurplus change? Show these changes in yourgraph.
Tammy loves donuts. The table shown reflects the value Tammy places on each donut she eats:Value of first donut $0.60Value of second donut $0.50Value of third donut $0.40Value of fourth donut $0.30Value of fifth donut $0.20Value of sixth donut $0.10a. Use this information to construct Tammy's demand curve for donuts.b. If the price of donuts is $0.20, how many donuts will Tammy buy? c. Show Tammy's consumer surplus on your graph. How much consumer surplus would shehave at a price of $0.20? d. If the price of donuts rose to $0.40, how many donuts would she purchase now? Whatwould happen to Tammy's consumer surplus? Show this change on your graph.

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cones $4.00 $3.50 $3.00 $2.50 Demand Quantity of ice eream cones Figure 4-1 shows Kendra's demand curve for ice-cream cones. Refer to Figure 4-1. What is the total amount that Kendra is willing to pay for 2 ice cream cones?