Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Question
Chapter 5, Problem 1SPA
To determine
Identify the role of market price in the allocation of resources.
Expert Solution & Answer
Explanation of Solution
There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first come–first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first come–first serve system.
In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first come–first serve system, and the reservation based on first come - first serve system.
In the case of first restaurant, reservations are essential. So, the method of first comes–first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.
In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.
Economics Concept Introduction
Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.
Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.
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Students have asked these similar questions
The following diagram shows supply and demand in the market for smartphones.
Use the black point (plus symbol) to indicate the equilibrium price and quantity of smartphones. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus.
Total surplus in this market is _______ million.
Complete all problems in attachment.
What is the maximum price consumers are willing to pay for the 25th hot dog?
At the market equilibrium, what are the consumer surplus, producer surplus and total surplus? Show your steps.
Use the following diagram to calculate total consumer surplus at a price of $12 and production of 500 thousand flu vaccinations per day. for the same equilibrium, calculate total producer surplus. Assuming price remained at $12 but production was cut to 200 thousand vaccinations per day, calculate producer surplus and consumer surplus. Calculate the deadweight loss from underproduction.
Chapter 5 Solutions
Microeconomics (13th Edition)
Ch. 5.1 - Prob. 1RQCh. 5.1 - Prob. 2RQCh. 5.1 - Prob. 3RQCh. 5.1 - Prob. 4RQCh. 5.2 - Prob. 1RQCh. 5.2 - Prob. 2RQCh. 5.2 - Prob. 3RQCh. 5.2 - Prob. 4RQCh. 5.2 - Prob. 5RQCh. 5.2 - Prob. 6RQ
Ch. 5.3 - Prob. 1RQCh. 5.3 - Prob. 2RQCh. 5.3 - Prob. 3RQCh. 5.4 - Prob. 1RQCh. 5.4 - Prob. 2RQCh. 5.4 - Prob. 3RQCh. 5.4 - Prob. 4RQCh. 5 - Prob. 1SPACh. 5 - Prob. 2SPACh. 5 - Prob. 3SPACh. 5 - Prob. 4SPACh. 5 - Prob. 5SPACh. 5 - Prob. 6SPACh. 5 - Prob. 7SPACh. 5 - Prob. 8SPACh. 5 - Prob. 9SPACh. 5 - Prob. 10SPACh. 5 - Prob. 11APACh. 5 - Prob. 12APACh. 5 - Prob. 13APACh. 5 - Prob. 14APACh. 5 - Prob. 15APACh. 5 - Prob. 16APACh. 5 - Prob. 17APACh. 5 - Prob. 18APACh. 5 - Prob. 19APACh. 5 - Prob. 20APACh. 5 - Prob. 21APACh. 5 - Prob. 22APACh. 5 - Prob. 23APACh. 5 - Prob. 24APACh. 5 - Prob. 25APACh. 5 - Prob. 26APACh. 5 - Prob. 27APA
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