Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Suppose the demand curve for a consumer for coffee is:

Q = 6 – 2P,

Where Q represents the number of cups per day and P is the price of coffee per cup. 

problem1. Assume the consumer is on coffee shop 1. Coffee shop 1 charges $2.00 per cup. 

- Draw and label demand curve for a cup of coffee for the consumer (please don’t forget to specify the intercept of demand curve for all of the axes).

- How many cups would she drinks a day and how much would she spend a day on coffee shop 1?  Elucidate your answer and demonstrate it on graph.

Hint: I would draw the incremental price of drinking a cup of coffee on the shop to show the number of cups the consumer selects.

- What are the consumer surplus and the average price per cup?

problem2. Assume the consumer is on coffee shop 2. Coffee shop 2 provides unlimited cups of coffee for the price of $9.00 per day.

- How many cups would she drinks a day and how much would she spend a day on coffee shop 2?  Elucidate your answer and demonstrate it on the graph.

Hint: Again, I would draw the demand curve and the incremental price of drinking a cup of coffee on the shop to show the number of cups consumer selects.

- What are the consumer surplus and the average price per cup?

problem3. Assume the consumer can choose either coffee shop 1 or coffee shop 2, but not both.

- Assuming that other things (like location, quality of coffee, and so forth) are the same, which coffee shop would the customer desire? Will the difference in average price per cup affect your choice between coffee shop 1 and 2? Elucidate your answer.   

- How, if at all, would your answer above change if coffee shop 2 provides unlimited cups of coffee for the price of $7.00 per day? Elucidate your answer.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9860

Have any Question? 


Related Questions in Macroeconomics

Part a what is classical dichotomy what is the neutrality

Part A) What is 'Classical Dichotomy'? What is the neutrality of money? Are the two related? If so,how are they related? What are the major economic and political conclusions of 'Classical Dichotomy'? 5) Part B) Do Class ...

Questionas part of a marketing research committee for your

Question: As part of a marketing research committee for your organization, you have been assigned the task of preparing a 700-word research paper about current microeconomic thought and theory. Use  Principles of Microec ...

Suppose the european union eu is investigating a proposed

Suppose the European Union (EU) is investigating a proposed merger between two of the largest distillers of premium Scotch liquor. Based on some economists' definition of the relevant market, the two firms proposing to m ...

This question basically asks you to compare the net present

This question basically asks you to compare the Net Present Value (NPV) to the Internal Rate of return (IRR) on the time length of an investment project. a. Draw a "growth curve" for a investment project on a log P V t s ...

What was the impact of the monetary policies during the

What was the impact of the monetary policies during the 1950's in the United States, specifically with interest rates?

Suppose nominal gdp in 2012 was 100 billion and in 2014 it

Suppose nominal GDP in 2012 was $100 billion and in 2014 it was $220 billion. The general price index in 2012 was 100, and in 2014 it was 140. Between 2012 and 2014, the real GDP rose by what percent?

Assume that the government of the state of new jersey has

Assume that the government of the state of New Jersey has determined that a large number of injuries and deaths have occurred as a result of accidents involving the installation and repairs of electrical equipment at pri ...

Your switched network has two catalyst 3560 switches with

Your switched network has two Catalyst 3560 switches with redundant connections. You are configuring the switches to increase available traffic bandwidth between them by actively negotiating an EtherChannel using PAgP ch ...

A describe five 5 ecosystem goods and services of the

a.) Describe five (5) ecosystem goods and services of the Neponset River Watershed. b.) Assign dollar ($) values to these 5 ecosystem goods and services of the Neponset River Watershed. Please be clear about how you asse ...

This question concerns labor mobility between countries a

This question concerns labor mobility between countries A and B. a. Say that country A's MPL = -L + 10 and country B's MPL = 2L + 1. What would be the optimal amount of L? Note: country B's MPL is written in terms of the ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro