Ask Question, Ask an Expert


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

Assignment elasticity of demandin this assignment you will

Assignment: Elasticity of Demand In this Assignment, you will focus on marginal utility, Price Elasticity of Demand, and understanding the difference between Price Elasticity of Demand and Income Elasticity of Demand. We ...

Hospitality economic reportformat individual report limited

Hospitality Economic Report Format: individual report, limited to 1500 words - use them wisely! The task is to produce a concise yet critical report, provide recommendations and recognise limitations of what you are reco ...

Assignmentwhen completing the las in the weekly discussions

Assignment When completing the LAs in the Weekly Discussions please follow these directions and format: In your narrative response to the LAs, start out by first clearly identifying, defining and explaining the managemen ...

Accounting for decision making- learning objectives- to

Accounting for Decision Making- Learning Objectives- To understand the types of information included in a business case and how the content of the business case will be shaped by the information needs of interested stake ...

Economic principles written assignment- there are two parts

Economic Principles Written Assignment- There are two parts, A and B, to this assignment. You need to answer both. Part A: Disruptive Technologies A major focus of economics is the analysis of markets and the impact of r ...

Crowd funding assignmentthe purpose of this assignment is

Crowd Funding Assignment The purpose of this assignment is to have you become familiar with the concept of crowdfunding. As such you should do the following: 1. Google crowd funding, visit crowd funding web sites, and le ...

Complete case- avis love staff accountant from the case

Complete Case- Avis Love, Staff Accountant from the case book. The written case analysis must be 5-7 pages in length, including APA format and include 6-7 scholarly citations/references. Prepare the case analysis using A ...

Assignmentmicroeconomicsdirections unless otherwise stated

ASSIGNMENT Microeconomics Directions: Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four dou ...

Assignment global business today - the hofstede studyrefer

Assignment: Global Business Today - The Hofstede Study Refer to Hofstede model in Chapter 4 of the textbook and the Global Business Today Interaction located below, and complete this assignment. Note: You must have a Fla ...

Discussion 1long-term investment and cost-benefit analysis

Discussion 1 "Long-Term Investment and Cost-Benefit Analysis" Please respond to the following: · From the scenario for Katrina's Candies, suggest one method in which Herb could use a cost-benefit analysis to argue for or ...

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate