Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

problem: Please define or describe the following terms. A complete answer will include a graph, equation, and/or ex as part of each definition.

1) Consumer surplus
2) Giffen good
3) Income elasticity of demand

problem: Yao's weekly demand for basketballs is given by Qd = 3P2 where P is the price of basketballs. At the current price, Yao's demand for basket balls is unit elastic. What is the current price of a basketball, and how many basketballs is Yao buying at this price?

problem: Each day Akiko, who is in third grade, eats lunch at school.

She likes only Twinkies (t) and soda (s), and these provide her with utility of

U(t; s) = t3 . s - 3
Twinkies cost $0.15 each and soda costs $0.30 per cup at the school cafeteria. Akiko's parents give her $1.20 each day for lunch.

1) Find the marginal utility of Twinkies (MUt) and marginal utility of soda (MUs) if Akiko buys t Twinkies and s sodas.

2) What two equations must hold at the bundle (t; s) that maximizes Akiko's utility? Solve for her optimal combination of Twinkies and sodas.

3) The school is considering several possible policies to curb Twinkie consumption. Among the policies being considered are (a) limiting students to one Twinkie per day; and (b) raising the price of Twinkies to $0.45 each. The PTA (Parent-Teacher Association) has hired you to guide its decision. Discuss the expected effects of these two policies, using graphs and/or equations, as appropriate. (You may assume that all students have preferences identical to Akiko's.) Which policy will you recommend?

problem: Jacques gets utility from atoms and molecules. Last week, Jacques had a weekly income of $150, and the price of atoms was $12. Jacques consumed seven atoms and eleven molecules. This week, the price of a molecule is $10; Jacques's income and the price of atoms are unchanged. Suppose Jacques consumes six molecules this week.

1) Indicate both budget constraints and both bundles on a well-labeled graph, with atoms on the x-axis.

2) Is Jacques better off or worse off this week relative to last week? describe.

3) Are atoms and molecules complements or substitutes for Jacques? describe.

4) Next week, prices are expected to be the same as this week, but Jacques's income is expected to increase to $200. Add this future budget constraint to your graph. Relative to last week, will Jacques be better off next week, worse off, or can't you tell? describe.

problem: After observing Olga's consumption choices for two days in a row, Pavel, an economics student, tells here: You must not be rational. Yesterday, when bananas were on sale for $1 and peaches were $5, you bought five bananas and one peach. Today, bananas are back to $2 and peaches are still $5, and you're still buying five bananas!"

1) Show graphically Olga's budget constraint and chosen bundle from yesterday.

2) Are there any explanations other than irrationality that are consistent with Olga's behavior? Use words, diagrams, and equations in your answer.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9137

Have any Question? 


Related Questions in Microeconomics

Question you work for a marketing firm that has just landed

Question: You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies, frizzles, and cannies. All of these products have been on the mar ...

Question examine the us governments support during the

Question: Examine the U.S. Government's support during the Great Depression for programs, such as the Federal Arts Project, the Federal Writers' Project, and other such efforts. Determine whether or not such projects wer ...

Question topic should the minimum wage be eliminated left

Question: Topic: Should the minimum wage be eliminated, left alone, or increased? If you believe it should be increased, state how much it should be increased and why. Your Position Statements are to be no more than a th ...

Question the american bakers association reports that

Question: The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a rep ...

Question 1 suppose janet sells papayas at a perfectly

Question: 1. Suppose Janet sells papayas at a perfectly competitive market in Thailand. While her average total cost (ATC) reaches a minimum level of $3, her minimum average variable cost (AVC) is $2. a. At what price wi ...

Question you are the author of a popular csr article for

Question: You are the author of a popular CSR article. For this week's discussion post, discuss the main reasons why Apple is or is not a socially responsible organization. List at least two examples of Apple's actions t ...

Question in the model the level of investment depends on

Question: In the model, the level of investment depends on the level of domestic savings. If the level of domestic savings is too low to allow the economy grow to the Golden Rule level without taxation, what other source ...

Question we the people is a national chain that offers

Question: We The People is a national chain that offers paralegal services such as filing forms in court for property transfers, wills, and simple bankruptcies.26 It charges flat fees for such services. Why might it choo ...

Question a firm in a perfectly competitive market invents a

Question: A firm in a perfectly competitive market invents a new method of production that lowers its marginal costs. What happens to its output? What happens to the price it charges? a. The firm has an employee who thre ...

Question a large video program and internet provider has

Question: A large video program and internet provider has seen a 10% annual rate of subscriber growth over the past three years. The growth rate has been spurred by a marketing department that typically has three or four ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As