PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Chapter 16.A, Problem 3SP
To determine
Find the number of times Person F goes for bowling and goes to movies
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The table details the total utility that J.J. gets from going to see basketball and hockey games during a month. J.J. had $120 to spend. Calculate the marginal utility and the marginal utility per dollar spent for both basketball and hockey given that the price is $20 and $30 respectively. Based on your calculations:
how many basketball games would he attend?
how many hockey games would he attend?
Ji - ho watches both movies and sports. He likes variety and prefers to watch a
balanced mix of both movies and sports rather than just one game. What do Ji - ho's
indifference curves look like, with movies on the y - axis and sports on the x - axis?
Draw the curves.
How do your total and marginal utility change as you stay at home watching the same TV show (not necessarily the same episode) alone all day?
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- Brenda wants to buy new car and has a budget of $25,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1 to 10, with 10 representing either the most styling or best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $6,250. She also observed that as the gas-mileage index rises by one unit, the price of the car increases by $5,000. Illustrate the various combinations of style (S) and gas mileage (G) that Brenda could select with her $25,000 budget. Using the line drawing tool, illustrate Brenda's budget line. Label this line 'Budget Line'. Carefully follow the instructions above, and only draw the required object. Suppose Brenda's preferences are such that she always receives two times as much satisfaction from an extra unit of styling as she does from gas mileage. What type of car will Brenda choose?…arrow_forwardRick eats only french fries and burgers at his office cafeteria. His weekly lunch budget is $48. Each burger costs $6 and each order of fries costs $3. When deciding how much of each good to buy, Rick knows that 2 burgers and 4 orders of french fries will give him a utility of 8. At his utility-maximizing point, Rick's utility is:arrow_forwardStyles 15. Damian Matthews is busy. He allocates his free time between watching movies and working out at the gym. The table below shows his utility from the number of times per week he watches a movie or goes to the gym. Damien has 14 hours a week to spend on movies or the gym (think of hours like $ of income here). Each movie takes 2 hours. Each gym trip takes 2 hours. Q of Gym Total Q of Movie Total Utility visits Utility from visits from Gym Visits movies 100 1 60 180 110 3 240 3 150 4 280 4 180 310 190 330 195 340 7 197 a) What bundles of gym visits and movies can Damien consume if he spends 1) all his time in the gym or 2) all his time watching movies? b) Calculate the marginal utility of each gym visit'and movie. Then calculate the Marginal Utility per hour of each activity. c) How should he allocate his time to maximize his utility? 12arrow_forward
- The table shows Jerry's total utility from lottery tickets and candy bars. The price of a lottery ticket is $2, the price of a candy bar is $4, and Jerry has $12 a week to spend. Calculate Jerry's marginal utility from the fourth lottery ticket and marginal utility per dollar when he buys 4 lottery tickets. Calculate Jerry's marginal utility from the second candy bar and marginal utility per dollar when he buys 2 candy bars >>> Answer to 1 decimal place. ………… Jerry's marginal utility from the fourth lottery ticket is units. The marginal utility per dollar from lottery tickets when Jerry buys 4 lottery tickets is units per dollar. Jerry's marginal utility from the second candy bar is units. The marginal utility per dollar from candy bars when Jerry buys 2 candy bars is units per dollar. C Lottery tickets Total utility 0 14 24 32 38 Quantity per week 0 1 2 3 4 Quantity per week ܘ ܝ ܚ ܚ ܂ 2 3 Candy bars 4 Total utility 0 100 120 134 144arrow_forwardTom is stranded on a deserted island where he can only consume coconuts and crabs. Two of his indifference curves are in the figure below. 1. Would Tom prefer his consumption to be at point a or at point b? 2. Would Tom prefer his consumption to be at point b or at point c?arrow_forwardPresent a budget line and a budget set for the consumer of two good X and Y, where the consumer has an income of $3,000 per month. Assume the price of X is 2 and the price of Y is 6. Suppose the price of Y decreases to 4. Show how your budget line changes and use your diagram to explain why the price decrease will make the consumer better off. Add at least two indifference curves, using them to show how the decrease in price will change the optimal choice, assuming the law of demand holds for good Y.arrow_forward
- Kevin likes going to the ballpark to watch baseball, and he also is fond of going to the theater to listen to the symphony orchestra. The following diagram shows two of Kevin's indifference curves for going to ballgames and symphonies. With Kevin's initial budget constraint (BC1), he chose to go to five symphonies and five baseball games per month (point X). Then his budget constraint shifted to BC2, and he chose to go to four symphonies and four ballgames per month (point Y). BALL GAMES 8 10 I I I I 4 5 SYMPHONIES BC BC B 10 Of the following choices, which could have shifted Kevin's budget constraint from BC₁ to BC2? Check all that apply. The price of symphony tickets increased while his income and the price of baseball tickets stayed the same. His income increased while the prices of baseball and symphony tickets stayed the same. The prices of both baseball and symphony tickets increased while his income stayed the same. His income decreased while the prices of baseball and symphony…arrow_forwardSuppose you have an income of $24 and the only two goods you consume are apples (x1) and peaches (x2). The price of apples is $4 and the price of peaches is $3. Suppose that your optimal consumption is 4 peaches and 3 apples. a. Illustrate this in a graph using indifference curves and budget lines. b. Now suppose that the price of apples falls to $2 and I take enough money away from you to make you as happy as you were originally. Will you buy more or fewer peaches? Provide a graphical representation.arrow_forwardRamona is an asparagus farmer and the world asparagus market is perfectly competitive. The market price is $23 a bundle. Ramona sells 800 bundles a week and her marginal cost is $25 a bundle. The market price falls to $20 a bundle, and Ramona cuts her output to 500 bundles a week. Ramona's average variable cost and marginal cost fall to S20 a bundle. Ramona is A. not maximizing profit because she has cut her asparagus production O B. not maximizing profit because she is incurring an economic loss C. maximizing profit and she is incurring an economic loss O D. maximizing profit and she is making an economic profit E. not maximizing profit because marginal revenue does not equal marginal costarrow_forward
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