What is the percent change in price of spaghetti between $10 and $12? What is the percent change in quantity of spaghetti when the price changes from $10 to $12? What is the elasticity of demand for spaghetti between the prices of $10 and $12?
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- Table: Utility for Terri and Mary Income Terri'sMarginal Utilityfrom Income Maty'sMarginal Utilityfrom Income $0 $100 14 11 $200 11 7 $300 6 6 $400 4 5 $500 2 4 Reference: Ref 20-3 Table: Utility for Terri and Mary (Table: Utility for Terri and Mary) Use Table: Utility for Terri and Mary. Each has an income of $300. _____ is more risk-averse because _____ has a _____ drop in total utility if income were to fall by $100. Select one: a. Terri; Terri; larger b. Terri; Mary; larger c. Mary; Terri; smaller d. Mary; Mary; largerConsider a town with a single street of 1 km long with 3,000 people spread uniformly along it. Two stores, 1 and 2, are located at the opposite ends of the street and sell the same product (store 1 is locatedattheleftend).Thecostofwalkingist1 =$6perkmtostore1andt2 =$9perkmtostore2for each consumer. The net utility of a consumer located at point x from buying a product at store 1 is U1(x) = 100 – p1 – t1x, where pi is a price of the product at store i = 1,2. The net utility from buying at store 2 is U2(x) = 100 – p2 – t2(1 – x). The average cost of the product for each store is c = 4. (a) Assume that all consumers buy product from the sellers. Find the demand functions Di(p1,p2) and the profit functions πi(p1,p2) for each store i = 1,2 as functions of prices p1,p2.(b) Find the equilibrium prices.EXERCISE 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…
- Suppose seller decreas price by 10% then hiw total revene will affect when ed =1.5 or ed=0.5 or ed=1True/False/Uncertain: 1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize hismarginal point utility per minute on all questions. 2. The marginal utility of food to Zecher depends only on the amount of food (and not on the amount ofhousing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)a. 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?
- Mylie’s total utility from singing the same song over andover is 50 utils after one repetition, 90 utils after tworepetitions, 70 utils after three repetitions, 20 utils afterfour repetitions, 250 utils after five repetitions, and 2200utils after six repetitions. Write down her marginal utilityfor each repetition. Once Mylie’s total utility beginsto decrease, does each additional singing of the songhurt more than the previous one or less than the previousone?Ann can finish a project either this week or next week. The delayed rewardsare 10 in either case. (The project can be done only once or not at all).Next week is busy and the cost of finishing the project are lower thisweek. Theimmediate costs are 4 this week and 6 next week.Ann has a quasi-hyperbolic utility withδ= 1 andβ <1. Imagine that Anndoes not finish the project this week. Then she should finish it next week (A) ifβ >0.6; (B) ifβ >0.4; (C) only ifβ= 1; (D) for anyβ.11. Suppose thatβ= 0.5 and Ann correctly anticipates her choice next week. Thenshe should finish the project (A) this week; (B) next week; (C) never; (D) not enough information. Suppose thatβ= 0.5, and Ann can commit to finish the project next week (e.g.by imposing a heavy cost on herself if the project is not finished nextweek).Then she will (A) do the project this week;(B) commit to do it next week and finish it then;(C) do it next week without commitment;(D) commit and then not finish it.Ann can finish a project either this week or next week. The delayed rewardsare 10 in either case. (The project can be done only once or not at all).Next week is busy and the cost of finishing the project are lower thisweek. Theimmediate costs are 4 this week and 6 next week.Ann has a quasi-hyperbolic utility withδ= 1 andβ <1. Imagine that Anndoes not finish the project this week. Then she should finish it next week (A) ifβ >0.6; (B) ifβ >0.4; (C) only ifβ= 1; (D) for anyβ.11. Suppose thatβ= 0.5 and Ann correctly anticipates her choice next week. Thenshe should finish the project (A) this week; (B) next week; (C) never; (D) not enough information. Suppose thatβ= 0.5, and Ann can commit to finish the project next week (e.g.by imposing a heavy cost on herself if the project is not finished nextweek).Then she will (A) do the project this week;(B) commit to do it next week and finish it then;(C) do it next week without commitment;(D) commit and then not finish it. Can you…
- Ewa spends all her 600 PLN bonus on the purchase of sweets and cosmetics. Draw the Ewa's budget line, knowing that her favorite sweets cost PLN 10 per pack and the price of cosmetics is PLN 25. •How will Ewa's situation be affected by the PLN 50 bonus increase? •What will happen if the price of cosmetics increases to PLN 30? •How, from the point of view of initial situation, we will evaluate the following quantitative combinations: –30 packages of sweets and 15 cosmetics –60 packages of sweets and 24 cosmetics –20 packages of sweets and 10 cosmetics –10 packages of sweets and 15 cosmeticsCo. 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. 2,700a) Diagrammatically show and explain how oil prices dropped as concerns over fuel demand in the near term in covid-19 pandemic it europe and the united states. b)Diagrammatically show and explain what happened to the oil market if the price remained unchanged despite the concerns over the fuel demand.