PRIN MACROECON LL+CNCT+SMARTBOOK
6th Edition
ISBN: 9781260580792
Author: Frank
Publisher: MCG CUSTOM
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Chapter 1, Problem 3RQ
To determine
Explain the decision of spending money on movie ticket or babysitting.
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The Brady family have a weekly budget of €200 to be spent on Food (F) and Other Goods
(OG), which are initially equally priced at €10 and €20 per unit, respectively. Given recent
inflation, the government has concerns about the ability of large families to afford an adequate
diet for children. Due to this, the government announces that when Food consumption exceeds
12 units, the government will subsidise food consumption so that the price per subsequent unit
will be €5 for any family.
With Food on the horizontal axis, show the family’s pre and post-scheme budget line. Can we
definitively determine the family’s utility maximising consumption bundle as a result of the
government scheme?
The American Baker’s Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. However, as a result of this new report, a typical consumer’s inverse demand for your bran muffins is now P = 8 – 1.5Q. If your cost of producing bran muffins is C(Q) = 0.5Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price.
The American Baker’s Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. However, as a result of this new report, a typical consumer’s inverse demand for your bran muffins is now P = 5 - 0.5Q.If your cost of producing bran muffins is C(Q) = 1.5Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price.Instruction: Enter your response for the optimal package price rounded to two decimal places.Optimal package size: units
Optimal package price: $
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- The American Baker’s Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. However, as a result of this new report, a typical consumer’s inverse demand for your bran muffins is now P = 3 − 0.5Q.If your cost of producing bran muffins is C(Q) = 1.0Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price.Instructions: Enter your response for the optimal package price rounded to two decimal places.Optimal package size: units Optimal package price: $arrow_forwardSeveral local golf tournaments are coming up and Tommy needs to purchase golf balls in preparation. He has set a $150 budget and will choose golf balls that will give him as much utility as possible. A local sporting goods store sells a box of golf balls at a retail price of $30 and Tommy purchases 2 boxes. A few buddies tell Tommy about an online store that offers boxes of golf balls at a discounted price of $21, while all other prices remain the same, and Tommy decides to purchase 3 additional boxes of golf balls to keep on hand. Given this information, plot Tommy's demand curve for golf balls. Provide your answer below: Price of Golf Ball Boxes Online Store (4,$22) 20 Local Store (1,$10) —101 Quantity of Golf Ball Boxesarrow_forwardA manufacturer of microwaves has discovered that male shoppers, on average, have lower values for microwave ovens than female shoppers. Additionally, male shoppers attribute almost no extra value to an auto-defrost feature, while female shoppers, on average, value the auto-defrost feature. The manufacturer has determined that men value a simple microwave at $70 and one with auto- defrost at $80, while women value a simple microwave at $80 and one with auto-defrost at $150. If there is an equal number of men and women, what pricing strategy will yield the greatest revenue?arrow_forward
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