+61-413 786 465

info@mywordsolution.com

## Economics

 Basic Economics Macroeconomics Microeconomics Business Economics Econometrics International Economics Managerial Economics Game Theory Public Economics

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 interest groups with normatively good causes often

Question: Interest groups with normatively "good" causes often use profesisonal lobbyists; this is evident from AARP's expenditures. Do you believe there is an ethical issue with interest groups using lobbyists? Why or w ...

### Question suppose a gym faces inverse demand pqi a - bqi

Question: Suppose a gym faces inverse demand p(qi) = a - bqi from each of N identical customers, and costsrepresented by C(Q) = cQ. Without competition, this would imply that qi = (a- c)/2b , and p = (a+c)/2 . The is one ...

### Question 1 why dose marx begin capital with commodity2 what

Question: 1. Why dose Marx begin Capital with commodity? 2. What is abstract labor? Is it a substance?Is it inherent in individual use values? How should we understand abstract labor? 3. What is the distinction Marx make ...

### Question a video rental store has estimated that the

Question: A video rental store has estimated that the inverse demand equation for video rentals by a typical customer is P = 6.50 - 0.5Q. The marginal cost of each rental is \$2.50. If the video rental store engages in tw ...

### Question - let demand be given by qd 8 - 2p let supply be

Question - Let demand be given by QD = 8 - 2P; let supply be given by QS = 2P. A tax of \$2 per unit is imposed on consumer, what is the new equilibrium quantity? a. 1 b. 2 c. 3 d. 4 e. 5

### A in 1994 the marginal cost of producing the power mac was

a) In 1994, the marginal cost of producing the Power Mac was about \$1,500 per unit, and a rough estimate of the monthly demand curve was: P = 4,500 - .15Q. At the time, what was Apple's optimal output and pricing policy? ...

### Question suppose there are two consumers a and b the

Question: Suppose there are two consumers A and B. The marginal rate of substitution of A is MRS = Y /X , A A A and that of B is MRS = Y /X. Draw an Edgeworth Box and show all the points at which exchange B B B efficienc ...

### Question new us tax legislation could include a tax credit

Question: New U.S. tax legislation could include a tax credit for the use of alternative energy sources that significantly reduces the cost of using alternative fuels. Explain, in economic terms, how this may impact the ...

### Question social and institutional innovations are as

Question: "Social and institutional innovations are as important for economic growth as technological and scientific inventions and innovations." What is meant by this statement? Explain your answer. The response must be ...

### Question a 250-gallon reactor cost exist7h0000 when it was

Question: A 250-gallon reactor cost exist7H0,000 when it was constructed 20 years ago. What would a 750-gallon model cost today if the power-sizing exponent is 0.56 and the construction cost index for such facilities has ...

• 13,132 Experts

## 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.

### 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