Please discuss the following 4 questions using concepts and knowledges you learned from this course. The word limit is 1000words in total. Each question worth 10 marks.
1. You and your friend Joe have identical tastes. At 2 pm, you go to your local Ticketmaster outlet and buy a $30 ticket to an AFL game to be played that night in Launceston, 200 kilometres north of your home in Hobart. Joe plans to attend the same game but, because he cannot get to a Ticketmaster outlet, he plans to buy his ticket at the game. Tickets sold at the game cost only $25, because they carry no Ticketmaster surcharge. (Many people nonetheless pay the higher price through Ticketmaster, to be sure of getting good seats.) At 4 pm an unexpected hailstorm begins, making the prospect of driving to Launceston much less attractive than it was before (but assuring the availability of good seats). If both you and Joe are rational, is one of you more likely to attend the game than the other?
2.Nancy and Lucy are studying economics. Nancy takes 4 hours to write an assignment and two hours to complete a set of tutorial questions. Lucy takes 6 hours to write an assignment and 2 hours to complete a set of tutorial questions. State whether either woman has an absolute advantage at either task and, for each task, identify who has a comparative advantage. Why would Nancy and Lucy never agree to specialise and then exchange economics assignments for economics tutorial questions if one economics assignment could be swapped for three economics tutorials?
3. The table below shows the number of croissants bought in Geelong, Victoria, each day at a variety of prices.
|
PRICE OF CROISSANTS ($)
|
NUMBER OF CROISSANTS PURCHASED PER DAY
|
|
6
|
0
|
|
5
|
3000
|
|
4
|
6000
|
|
3
|
9000
|
|
2
|
12000
|
|
1
|
15000
|
|
0
|
18000
|
a) Graph the daily demand curve for croissants in Geelong.
b) Calculate the price elasticity of demand at the point on the demand curve at which the price of croissants is $3.
c) If all bakeries increased the price of croissants from $3 to $4, what would happen to total revenues?
d) Calculate the price elasticity of demand at a point on the demand curve at which the price of a croissant is $2.
e) If all bakeries increased the price from $2 to $3 per croissant, what would happen to total revenues?
4. In which type of restaurant would you expect the service to be more prompt and courteous: an expensive gourmet restaurant or an inexpensive cafe? Explain.