EBK PRINCIPLES OF MICROECONOMICS
12th Edition
ISBN: 9780134069180
Author: Oster
Publisher: YUZU
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Chapter 2, Problem 1.11P
To determine
The relevance of
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Julia and Ralph need to decide which one of them will take time off from work to complete the rather urgent task of pruning their trees. Julia is pretty good with a pole saw; she can prune the trees in 1 hour. Ralph is somewhat slow; it takes him 6 hours to prune the trees. Julia earns $120 per hour as a business consultant, while Ralph earns $15 per hour as a lifeguard.Keeping in mind that either Julia or Ralph must take time off from work to prune the trees, who has the lowest opportunity cost of completing the task?
While spending the weekend in New York City, Raphael, Susan, and their son, Alex, are lucky enough to hail the Cash Cab for their taxi ride. During their ride, they win $200 for correct answers and receive only one strike for a wrong answer, so at the end of the ride they are eligible for the video bonus question. Their vacation budget before entering the cab was $400, and based on their understanding of the type of bonus question they’ll be asked, they believe they have a 80% chance of getting the question right. As explained in the article, if they answer the video bonus question correctly, they will double their winnings, but if they miss the video bonus question, they will lose all of what they had previously won. Alternatively, they can choose not to play for the bonus and walk away with their winnings from the cab ride.
The following graph shows the cab riders’ utility as a function of their total vacation budget. For simplicity, assume that all three passengers have the same…
Table 22-21
Three longtime friends-Linda, Stella, and Lydia are deciding how they will spend their Sunday afternoon. They all agree that they should do one of the three things: go to a
comedy club, play soccer, or go to a tennis tournament. They also agree that they will have two pairwise votes to determine how to spend their afteroon, with the majority
determining the outcome on each vote. The first, second, and third choices for each person are as indicated in the following table.
First choice
Second choice
Third choice
Linda
tennis tournament
soccer
comedy club
Stella
soccer
comedy club
tennis tournament
Lydia
comedy club
tennis tournament
soccer
Refer to Table 23-2. If (1) the first vote pits "tennis tournament" against "comedy club," and (2) the second vote pits "soccer against the winner of the first vote, then the
outcome is as follows:
ⒸA "Tennis tournament" wins the first vote and "tennis tournament" wins the second vote, so they go to a tennis tournament
OB. "Tennis…
Chapter 2 Solutions
EBK PRINCIPLES OF MICROECONOMICS
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