O \lour margunel benetit trom eahing Candy bous is Shoon in the teible bela #Candy Bars Marginal Benetel 2 3. あ2 4 i which Core principle is represented in this Seenario? lo0 ts 4 the price o7 a Candy bar s $3 many has Should you buy? @@plonation.
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- Suppose Alphonsos town raises the price of bus tickets from 0.50 to 1 and file price of burgers rises from 2 to 4. Why is file opportunity cost of bus tickets unchanged? Suppose Alphonsns weekly spending money increases from 10 to 20. How is his budget constraint affected from all three changes? Explain.Suppose Alphonsos town raised the price of bus tickets to 1 per trip (while file price of burgers stayed at 2 and his budget remained 10 per week.) Draw Alphonsos new budget constraint. What happens to file opportunity cost of bus tickets?Nimbus, Inc., makes brooms and then sells themdoor-to-door. Here is the relationship between thenumber of workers and Nimbus’s output during agiven day:Workers OutputMarginalProductTotalCostAverageTotalCostMarginalCost0 0 ____ ________ ____1 20 ____ ________ ____2 50 ____ ________ ____3 90 ____ ________ ____4 120 ____ ________ ____5 140 ____ ________ ____6 150 ____ ________ ____7 155 ____ ____a. Fill in the column of marginal products. Whatpattern do you see? How might you explain it?b. A worker costs $100 a day, and the firm has fixedcosts of $200. Use this information to fill in thecolumn for total cost.c. Fill in the column for average total cost. (Recallthat ATC T 5 C Q/ .) What pattern do you see?d. Now fill in the column for marginal cost.(Recall that MC TC 5 D ∆ / Q.) What patterndo you see?e. Compare the column for marginal productwith the column for marginal cost. Explain therelationship.f. Compare the column for average total costwith the column for marginal cost. Explain…
- )ncob buys only milk and cookies.a. In yeor 1, Jocob earns $100, milk costs $2 perqua rt, and cooki es cost S4 per dozen. Ora\"•jacob's budget constraint.b. Now suppose that a ll prices increase by10 percent in yeor 2 ond !hot jacob's salaryincreases by 10 percent as well. Draw jacob'sn<:w budget constraint. How would Jacob'soptimnl combination of milk and cookies in year 2compare to his optimal combination in year 17a. A young connoisseur has $600 to spend to build a smallwine cellar. She enjoys two vintages in particular: a 2001French Bordeaux (wF) at $40 per bottle and a less expensive 2005 California varietal wine (wC) priced at $8. Ifher utility is U (wF, wC))=wF2/3 w C1/3 ,then how much of each wine should she purchase?b. When she arrived at the wine store, this young oenologistdiscovered that the price of the French Bordeaux hadfallen to $20 a bottle because of a decrease in the valueof the euro. If the price of the California wine remainsstable at $8 per bottle, how much of each wine shouldour friend purchase to maximize utility under thesealtered conditions?c. Explain why this wine fancier is better off in part (b)than in part (a). How would you put a monetary value onthis utility increase?Co. XYZ manufactures a productand sells it for $8 per unit. Her fixedcosts are $5,000 and her variablecost per unit is given by the equationCalculate the equilibrium quantity qalgebraically. 2.444 (X)-2200 A. (q-800) B. q=900 C. (q 650) D. None of the above In the previous problem (27), calculate the amount ofequilibrium Total Income. A. 4,500 B.$3,000 C. $7,200 D. $9,000 In the above problem (27), calculate thebreak-even Total Cost amount. A. 4,500 B. $3,000 C. $9,200 D. 7,200 In the previous problem (27)determine the profit when q-1800.modes of A. $4,500 B. 5,000 C.$6,000 D. 7,000 In the previous problem (27), determine the gain when q-450. A. $2,500 B. -$2,500 C.$6,000 D. -$4,500 In the aboveproblem (27), find the required output (q), to make a profit of$10,000. A. 3,000 B. 4,000 C. 2,500D. 2,700
- The president of LeTall University, President John, spends $30 per week on pizzas (qz)and beers (qb). At LeTall Pizza, his go-to pizza joint, pizza costs $3 per slice and beeralso costs $3 per can. Assume fractions of the goods are allowed.(a) Draw President John’s budget line (qb on the horizontal and qz on the vertical axis).(b) President John receives a coupon from LeTall Pizza. The coupon, which will expirein a week, allows him to buy a can of beer at a discounted price of $1 per can. Itis, however, only good for a dozen cans of beer. Draw President John’s budget lineunder the coupon. Label any critical points on the budget line.(c) In another week, LeTall Pizza offers a special deal for pizza. For every half dozenslices of pizza bought during the week, one can get two additional slices for free.Draw President John’s budget line under the special deal. Label any critical pointson the budget line.ASAP DECİSİON RULE FOR UTİLİTY MAXİMİZATİON As I understand we choose the good which has higher marginal utility per dollar . BUT MY QUESTİON İs that What if our budget is not end up and the marginal utility per dollar is same for both good What should we do at that point? PLEASE ANSWER MY QUESTİON DONT GİVE CLLASİC DEFİNİTİONa) You are given a utility function described as:U= U(K, L, M) = 10LogK + SLogL. + 2LogMWhere K, L and M are goods consumed. The individual has K100 to spend on the threeitems. Furthermore, you are informed that monthly salary is $500 and the prices of K, Land M are $2, $10 and $4 respectively. Calculate the consumer's optimal bundle.D.b) Provided a demand curve for Beans is as followsO = 4000 - 255PWhere Q is the quantity demanded and P is the price. Find the elasticity at K7, K10 and K15.
- Bart and Lisa are both optimizing consumers in themarkets for shirts and hats, where they pay $100for a shirt and $50 for a hat. Bart buys 8 shirts and4 hats, while Lisa buys 6 shirts and 12 hats. Fromthis information, we can infer that Bart’s marginalrate of substitution is _________ hats per shirt, whileLisa’s is _________.a. 2; 1b. 2; 2c. 4; 1d. 4; 2EXERCISE 1Below is a production possibilities table for consumer goods (Food) and capital goods(Robots):A B C D EFood 0 1 2 3 4Robots 10 9 7 4 01. Show these data graphically. Upon what specific assumptions is this productionpossibilities curve based?2. If the economy is at point C, what is the cost of one more food? Of one morerobot? Explain how the production possibilities curve reflects the law ofincreasing opportunity costs.3. If the economy characterized by this production possibilities table and curvewere producing 3 food and 2 robots, what could you conclude about its use ofavailable resources?4. What would production at a point outside the production possibilities curveindicate? What must occur before the economy can attain such a level ofproduction?EXERCISE 2Explain how (if at all) each of the following affects the location of a country’s productionpossibilities curve:1. The quality of education increases.2. The number of unemployed workers increases.3. A new technique…If the price of a magazine is 4 each, what is the maximum number of magazines she could buy in a week?
