If the price of beef was $45.00 what is the optimum number of cows and the profit or loss at that number and price? Ans. Cows Ans. Profit/Loss At some point the price of beef could be so low that you would be better off with no cows and leaving the pasture idle. This would happen whenever the price of beef was below what value? Ans. to make 225 the optimum number of cows. The price of beef would have to be at least $

If the price of beef was $45.00 what is the optimum number of cows and the profit or loss at that number and price? Ans. Cows Ans. Profit/Loss At some point the price of beef could be so low that you would be better off with no cows and leaving the pasture idle. This would happen whenever the price of beef was below what value? Ans. to make 225 the optimum number of cows. The price of beef would have to be at least $

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section: Chapter Questions

Problem 3DQ

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Antonio buys five new college textbooks during his first year at school at a cost of $80 each. Used books cost only $50 each. When the bookstore announces that there will be a 10 percent increase in the price of new books and a 5 percent increase in the price of used books, Antonio’s father offers him $40 extra. What happens to Antonio budget line when the price of new books increases by 10 percent? Is Antonio worse or better off after the price change
Question Earlier this year, 2021, the price of chicken meat rose unexpectedly reached to 250/ kilo at peak from the previous price of 170/ kilo. This 68% increase of price per kilo was primarily caused by excess demand for chicken meat. This is the result of the decrease in consumption for pork meat due to the threat of African Swine Flu (ASF). However, even though consumer shifted preferences, the increase in the price of chicken was perceived to be too high for the budget of consumers. Therefore, sellers realized decrease in their daily aggregate sales from 1,000 kilos to 700 kilos. 1. Illustrate the change in the market equilibrium through a graph. 2. What presumably happened to the total revenues of the sellers during the price hike period? a.) Compute the price elasticity of demand b.) Derive the total revenue before the hike (TR1), and after the hike (TR2).
A consumer has income of 15000. Masks costs $35 per mask, and sanitizers cost $70 per bottle. Under what circumstance(s) if an can an increase in the price of sanitizers induce a consumer to buy more of that good? Explain
Ahmed has a limited weekly income of $65, and he spends it all on cheeseburgers and J’s . Assume the price of each cheeseburger is $10 and the price of J is $5 per unit.
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A consumer has income of $15,000. Masks costs $35 per mask, and sanitizers costs $70 per bottle. Under what circumstance(s) if any can an increase in the price of sanitizers induce a consumer to buy more of that good? Explain. Explain how a consumer should allocate expenditure in order to achieve maximum satisfaction and analyse how a rise in income might affect that allocation.
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Marie has a weekly budget of $24, which she likes to spend on magazines and pies. Calculate: a) If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week? b) If the price of a pie is $12, what is the maximum number of pies she could buy in a week? c) Draw Marie’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint? d) What is Marie’s opportunity cost of purchasing a pie? NOTE: To answer this question simply work your answer in a piece of paper, take a photo of it and upload the file. Remember that this is a problem solving question, hence you must show your work!
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What happens to the original budget line if the price of good ? doubled? (i.e., Will there be a change in the slope and/or intercepts of the original budget line? If yes, what are those changes?). Interpret economically how the change in the price of good ? affects the consumption decision of the consumer