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Bartleby Sitemap - Textbook Solutions

All Textbook Solutions for ECON MICRO

1.1P 2.2P 2.3P 2.4P 2.5P (Role of Theory) What good is economic theory if it can't predict the behavior of a specific individual?4.7P 4.8P (Studying Economics) According to the text, economics majors on average make more money than most other majors and have more job opportunities. Are these the primary motivations one might have for studying economics? What are your motivations for studying economics?1.1P 1.2P 2.3P 2.4P 3.5P 3.6P 3.7P 3.8P 4.9P 1.1P 1.2P 1.3P 1.4P 2.5P 2.6P 2.7P 2.8P 3.9P 3.10P 3.11P 3.12P 4.13P 4.14P 1.1P 1.2P 2.3P 3.4P 3.5P 4.6P 4.7P 4.8P 5.9P 5.10P 6.11P 6.12P 6.13P 6.14P 7.15P (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?(Price Elasticity and Total Revenue) Fill in the blanks for each price-quantity combination listed in the following table. Now graph this relationship, making sure to label each axis. What relationship have you depicted?(Categories of Price Elasticity of Demand) For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified. Absolut Value Elasticity Effect of Price Increase a b c d 2.4P (Determinants of Price Elasticity) Would the price elasticity of demand for electricity be more elastic over a shorter or a longer period of time?(Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following combinations of price and quantity supplied. In each case, determine whether supply is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. a. Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 400 units. b. Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 500 units. c. Price falls from $2.25 to $1.75; quantity supplied remains at 600 units. d. Price increases from $1.75 to $2.25, quantity supplied increases from 466.67 units to 600 units.(Cross-Price Elasticity) Rank the following in order of increasing (from negative to positive) cross-price elasticity of demand with coffee. Explain your reasoning. Bleach _____ Tea _____ Cream _____ Cola _____4.8P (Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.1.1P 1.2P 1.3P 2.4P 2.5P 2.6P 3.7P 3.8P 3.9P 3.10P 1.1P 1.2P 1.3P 1.4P 2.5P 2.6P 3.7P 3.8P 3.9P 4.10P 4.11P 1.1P 1.2P 1.3P 2.4P 3.5P 3.6P 4.7P 4.8P 5.9P 5.10P 6.11P 6.12P 6.13P 6.14P 7.15P 1.1P 1.2P 2.3P 3.4P 4.5P 5.6P 5.7P 6.8P 6.9P 6.10P 1.1P 1.2P 1.3P 2.4P 2.5P 3.6P 3.7P 3.8P 3.9P 3.10P 3.11P 4.12P 1.1P 1.2P 2.3P 2.4P 3.5P 4.6P 5.7P 5.8P 5.9P 1.1P 1.2P 1.3P 2.4P 3.5P 3.6P 3.7P 4.8P 4.9P 4.10P 4.11P 1.1P 1.2P 1.3P 2.4P 2.5P 2.6P 3.7P 4.8P 4.9P 5.10P 5.11P 6.12P 6.13P 6.14P 1.1P 1.2P 1.3P (Search with imperfect Information) The following questions concern the accompanying graph. a. Identify the two curves shown on the graph, and explain their upward or downward slopes. b. Why does curve A intersect the horizontal axis? c. What is the significance of quantity d? d. What does e represent? e. How would the optimal quantity of information change if the marginal benefit of information increased—that is, if the marginal benefit curve shifted upward?2.5P 3.6P 3.7P 3.8P 4.9P 4.10P 5.11P 5.12P 1.1P 1.2P 2.3P 3.4P 3.5P 4.6P 4.7P 5.8P (Optimal Provision of Public Goods) Using at least two individual consumers, show how the market demand curve is derived from individual demand curves (a) for a private good and (b) for a public good. Once you have derived the market demand curve in each case, introduce a market supply curve and then show the optimal level of production.1.2P 2.3P 2.4P 2.5P 2.6P 3.7P 3.8P 4.9P 4.10P 1.1P 1.2P (Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the activity that creates that externality. When the amount of the externality produced per unit of output increases as output increases, the correct tax can be determined by using a demand-supply diagram; show this. Assume that the marginal private cost curve slopes upward. Negative Externalities: The Market for Electricity in the Midwest:2.4P 2.5P (External Costs with Variable Technology) Think of an industry that pollutes the water and has access to variable technology for reducing that pollution. Graphically illustrate and explain the impact of each of the following, other things constant, on the optimal level of water quality: a. New evidence is discovered about a greater risk of cancer from water pollution. b. The cost of pollution-control equipment increases. c. A technological improvement reduces the cost of pollution control.2.7P 3.8P 4.9P 1.1P 1.2P 2.3P 2.4P 2.5P 2.6P 3.7P 4.8P 5.9P 1.1P 1.2P 1.3P 1.4P 2.5P 2.6P 2.7P 3.8P 4.9P 4.10P 1.1P 1.2P 2.3P 3.4P 4.5P 4.6P 4.7P 1.1P 2.2P 2.3P 3.4P 4.5P 4.6P

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