EBK MICROECONOMICS
EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
Question
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Chapter 9, Problem 4P

(a)

To determine

The individual demand curve for paintings of both persons.

(b)

To determine

The overall demand curve for both the individuals if paintings are private goods.

(c)

To determine

The new social benefit curve if paintings are public goods.

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You must allocate the 70,000 seats in Reliant Stadium (in Houston) among Texan (Houston) and Cowboy (Dallas) fans for an upcoming game between the two footfall teams. You can set different prices for seats in the Dallas and Houston sections of the stadium. Suppose you can obtain $40/ticket from Houston fans irrespective of the number of seats you allocate to Houston fans. You must drop price in order to sell more tickets to Dallas fans, however. Let Q be the number of tickets you allocate to Dallas fans. Assume that the maximum price you can charge for these tickets is given by the following inverse demand function P= 80 500 (a) Express the total revenue (on all 70,000 seats) from ticket sales as a function of Q; (b) Derive the first-order condition of the revenue-maximizing problem (it's a function about Q); (c) What is the optimal number of seats allocated to Dallas fans?
When consumers have a budget, their utility is maximized by buying a combination of goods such that the marginal utility per dollar is the same for all of these goods. This is because if this were not the case, it would mean that the consumer hadn't used up their entire budget. of their insatiability. if a consumer could get higher marginal utility from one good than from others, they would want to buy more of that good, and less of others. if a consumer could get higher marginal utility from one good than from others, they would want to buy less of that good, and more of others. it guarantees them some variety.
Consider a hypothetical consumer named Hayden who is shopping for bread and brie. The graph with bread and brie on the axes presents the utility‑maximizing combinations of bread and brie that Hayden chooses when the price of bread is $1.00$1.00 per loaf and the price of brie is $4.00$4.00 and $6.00$6.00 per wheel, respectively. The other graph shows Hayden's demand curve for brie. The two points and associated values in the graph for bread and brie combinations correspond to points A and B in the graph of the demand curve for brie. What are the specific prices and quantities of brie associated with points A and B on Hayden's demand curve?   price of brie at point A: $$     quantity demanded at point A:     price of brie at point B: $$     quantity demanded at point B:
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