Macroeconomics
Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 5, Problem 11APA
To determine

Identify the method of allocating resources.

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ECONOMICS Please Show Your Work With an Explanation This problem set explores what happens to pricing when we add network effects, which are a specific form of positive externality.   You’ve invented a 3D fax machine. This cool technology is almost like a Star Trek teleporter. You can scan an object at one machine, which creates an exact copy at another 3D fax machine. It is so valuable that as more people use it, it becomes more valuable, and the price any given user is willing to pay increases in turn.   Consider a scenario in which there are 12 possible users, who each value the fax machine at i*n, where i is the index of that user (from 1 to 12), and n is the number of other purchasing users. So, if no one buys the 3D fax machine, everyone values it at 0. However, as soon as one person buys the device, then the 12 possible users begin to value the product at 1, 2, … 12, respectively. If 2 people purchase, the 12 possible users’ valuations increase to 2, 4, … 24, and so on. Because…
Plum sells high-end computers, tablets, and smart phones in Virginia. Plum sees its primary market as hip millennials, who wear glasses with thick black frames. The law of Virginia prohibits Plum from putting any conditions on selling its goods, and Plumb must sell to any retailer willing to pay Plum’s wholesale prices. Which of the following best describes the allocation of rights between Plum and its retailers? A. Plum has a property right to set retail prices and service levels. B. Plum’s entitlement to set retail price and service levels is protected by a liability rule. C. Plum retailers have a property right to set retail prices and service levels. D. Plum retailers’ entitlements to set retail price and service levels is protected by an inalienability rule. E. Both A and C
Q3: If you have the following data: price (8,4,5,6,7) and quantity (5,4,3,2,1) and the desired hypocrisy (8, 15, 1, 2, 27) find the consumer’s surplus
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