uppose there are three (3) people in a market for bottles of perfume; Mutumbu, Jasanu and Julius The individual demand for perfumes for each of these consumers is given as 10 bottles for Mutumbu, 15 bottles for Jasanu and 25 bottles for Julius at $60 per bottle for perfume. Thus, the market demand for perfumes if the market price is $60 is. (a)40 bottles (b)60 bottles (c)80 bottles (d) None of theb above

uppose there are three (3) people in a market for bottles of perfume; Mutumbu, Jasanu and Julius The individual demand for perfumes for each of these consumers is given as 10 bottles for Mutumbu, 15 bottles for Jasanu and 25 bottles for Julius at $60 per bottle for perfume. Thus, the market demand for perfumes if the market price is $60 is. (a)40 bottles (b)60 bottles (c)80 bottles (d) None of theb above

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.1P

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Be fast Suppose there are three (3) consumers in a market for bottles of perfume; Mutumbu, Jasanu and Julius The individual demand for perfumes for each of these consumers is given as 10 bottles for Mutumbu, 15 bottles for Jasanu and 25 bottles for Julius at $60 per bottle for perfume. Thus, the market demand for perfumes if the market price is $60 is: (a)40 bottles (b)60 bottles (c)80 bottles (d) None of the above
Q3Use a matrix method to find the equilibrium prices and quantities where the supply and demand functionsfor Good 1, Good 2 and Good 3 are asQd1 = 50 − 2P1 + 5P2 − 3P3, Qs1 = 8P1 − 5Qd2 = 22 + 7P1 − 2P2 + 5P3, Qs2 = 12P2 − 5Qd3 = 17 + P1 + 5P2 − 3P3, Qs3 = 4P3 − 1
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).
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. Illustrate the change in the market equilibrium through a graph. What presumably happened to the total revenues of the sellers during the = price hike period? Compute the price elasticity of demand. Derive the total revenue before the hike (TR1), and after the hike (TR2).
The marginal utility of the last unit of apples consumed is 12, and the marginal utility of the last unit of bananas consumed is 9. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium? Multiple Choice $3 and $4 $4 and $3 $9 and $12 $15 and $10
if the equilibrium quantity is 50 units, show on a raph that the difference between the maximum buying price & minimum selling price is greater at 25 than at 33 units.
Consider the market for wine in a small town where all the 1000 residents live at equal distances on a 10-mile long stretch of Pine St. There are two wine stores, Tipsy’s and Jack’s, that are located on opposite ends of town; assume that Tipsy’s is located on the west side and Jack’s on the east side. All residents need only 1 bottle of wine. The wine at Jack’s is of a better quality than Tipsy’s. As a result, each resident values wine from Tipsy’s at VT = $15, 1 and from Jack’s at VJ = $22. Assume that each store has a marginal cost of $4 per bottle. Each consumer experiences a transportation disutility cost of $1 per round-trip mile. So, the total travel cost of purchasing wine from a store ? miles away is $?. Suppose the stores set prices sequentially, with Tipsy’s going first. (a) If Tipsy’s were to set a price of $11, what price should Jack’s set? Show your work. (b) Suppose, instead, that in addition to setting a price of $11, Tipsy’s announces that they will refund 50% of the…
If in the study results obtained a demand and supply model for ties and suits: Demand for tie: Qdt = 410 – 5Pt – 2Ps Supply of tie: Qst = – 60 + 3Pt Demand for suit: Qds= 295 – Pt – 3Ps Supply of suit: Qss=–120 + 2Ps Based on the estimation results, then: a. Determine the general equilibrium price of a tie and suit b. What is the type of relationship between a tie and a suit? Explain your argument
Joe mows lawns in his neighborhood for extra money. Suppose the demand for lawn mowing in Joe's neighborhood is: Qd = 46 - 2P and that the supply of lawn mowing (Joe's willingness to mow lawns) is: Qs = -14 + P The market-clearing price of lawn mowing is $20 and the market clearing quanitiy is 6. What is the corresponding consumer surplus?
Suppose the government requires beer drinkers to pay P100 per case of beer purchased.
Amy has sold 50 eggs for $12 and 70 are sold for $14. What is the conclusion in this price range:
Smith and Jones are stranded on a desert island. Each has in her possession some slices of ham (H) and cheese (C). Smith prefers to consume ham and cheese in the fixed proportion of 2 slices of cheese to each slice of ham. Her utility function is given by Us = min(10H, 5C). Jones, on the other hand, regards ham and cheese as substitutes – she is always willing to trade 3 slices of ham for 4 slices of cheese, and her utility function is given by UJ = 4H + 3C. Total endowments are 100 slices of ham and 200 slices of cheese. a. Draw the Edgeworth Box diagram for all possible exchanges in this situation. What is the contract curve for this exchange economy? b. Suppose Smith’s initial endowment is 40 slices of ham and 80 slices of cheese (Jones has the remaining ham and cheese as her initial endowment). What mutually beneficial trades are possible in this economy and what utility levels will Smith and Jones enjoy from such trades? c. Now imagine a new endowment in which Smith has 60 slices…