Principles Of Microeconomics
7th Edition
ISBN: 9781260111088
Author: Robert H. Frank, Ben Bernanke, Kate Antonovics, Ori Heffetz
Publisher: McGraw-Hill Education
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Chapter 1, Problem 1.1CC
To determine
Estimate the value of economic surplus.
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Problem 5
Consider an exchange economy with two people: Will and Bob; and two goods: apples and bananas. Will's initial endowment is 10 apples and 5 bananas. Bob's initial endowment is 5 apples and 10 bananas. Will likes apples and hates bananas. Bob likes both apples and bananas. The preferences of both Will and Bob are strictly convex.
(a) Draw an Edgeworth Box with apples on the horizontal axes. Put Will at the bottom left corner and Bob at the top right corner. Show the initial endowment and label it with W.
Which of the following statements is most true?
You will purchase 2 slices of pizza because the Marginal Cost of the third slice exceeds the Marginal Benefit.
You will purchase 2 slices of pizza because the Marginal Cost of the third slice exceeds the Marginal Benefit.
You will purchase 3 slices of pizza because the Marginal Cost of the fourth slice exceeds the Marginal Cost.
You will purchase 3 slices of pizza because the Marginal Cost of the fourth slice exceeds the Marginal Cost.
You will purchase 2 slices of pizza because the Marginal Benefit of the third slice exceeds the Marginal Cost.
You will purchase 2 slices of pizza because the Marginal Benefit of the third slice exceeds the Marginal Cost.
You will purchase 1 slice of pizza because the Marginal Benefit of the second slice exceeds the Marginal Cost
You are the manager of a firm that specializes in small single-board widgets.Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions:
Control Variable
(Z)
Total Benefits
B(Z)
Total Cost
C(Z)
Net Benefits
N(Z)
Marginal Benefit
MB(Z)
Marginal Cost
MC(Z)
Marginal Net Benefit
MNB(Z)
0
0
0
1
200
10
2
380
30
3
540
60
4
680
100
5
800
150
6
900
210
7
980
280
8
1040
360
9
1080
450
10
1100
550
A. Graph the total cost and total benefit curves.B. On another graph, plot the points for the marginal cost, marginal benefit, and marginal net benefit.C. Show how the two…
Chapter 1 Solutions
Principles Of Microeconomics
Ch. 1.A - Prob. 1CCCh. 1.A - Prob. 2CCCh. 1.A - Prob. 3CCCh. 1.A - Prob. 4CCCh. 1.A - Prob. 5CCCh. 1.A - Prob. 6CCCh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQ
Ch. 1 - Prob. 5RQCh. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Residents of your city are charged a fixed weekly...Ch. 1 - Prob. 8PCh. 1 - For each long-distance call anywhere in the...Ch. 1 - Prob. 10PCh. 1 - Prob. 1.1CCCh. 1 - Prob. 1.2CCCh. 1 - Prob. 1.3CCCh. 1 - Prob. 1.4CCCh. 1 - Prob. 1.5CC
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