12. Wayne has $2,000 dollars to spend on Grey Cup football tickets (measured in numbers along the horizontal axis) and on other goods (measured in dollars on the vertical axis). His preferences and budget line are represented in the figure below. Wayne's optimal choice is to buy 4 tickets, but the maximum he can buy from the box office is just two tickets. What is the box office price for a ticket? $ willing to pay a scalper for two more tickets? $ What is the maximum price Wayne is other goods (S) 2,000 1,600 1,200 800 400 2. 4 10 Number of Grey Cup Tickets

12. Wayne has $2,000 dollars to spend on Grey Cup football tickets (measured in numbers along the horizontal axis) and on other goods (measured in dollars on the vertical axis). His preferences and budget line are represented in the figure below. Wayne's optimal choice is to buy 4 tickets, but the maximum he can buy from the box office is just two tickets. What is the box office price for a ticket? $ willing to pay a scalper for two more tickets? $ What is the maximum price Wayne is other goods (S) 2,000 1,600 1,200 800 400 2. 4 10 Number of Grey Cup Tickets

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph shows Hilary's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line From the previous graph, you can tell that Hilary is willing to pay $_______ for her 8th slice of cheesecake each week. Because she has to pay only$3.00 per slice, the consumer surplus she gains from the 8th slice of cheesecake is $_______. Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Hilary would receive a consumer surplus of $_______.from the 8th slice of cheesecake she buys.The following graph shows the weekly market demand for cheesecake in a small economy. Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of cheesecake is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the…
5. Jonas purchases only two goods, starfruit (S) and kiwi (K). He has an income of $60 and can buy starfruit at $2 per pound and kiwi at $3 per pound. His utility function is U(S,K)=3S+4K. That is, his (constant) marginal utility for starfruit is 3 and his marginal utility for kiwi is 4. What bundle of starfruit and kiwi should he purchase to maximize his utility? Why?
Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $18, the price of good B is $6, the price of good C is $4, and the price of good D is $24. Ricardo's income is $106. Column 1 Units of A 1 2 3 4 B= 5 6 7 B units. C= 3 units. MU 72 54 45 36 27 18 15 12 Unit A 4 +5 18 Units of B 1 2 3 Column 21 4 5 6 7 8 MU 24 15 12 Unit B 9 7 5 2 1 +0 6 Units of C 1 2 3 Instructions: Enter your answers as whole numbers. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? A = 4 units. 4 5 6 Unit C 7 Column 3 8 MU 15 12 8 7 5 4 3.5 3 Amount of Savings G Units of D 1 24 2 3 4 D-0 units. b. How many dollars will Ricardo choose to save? $ c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. 5 6 Column 4 7 8…
Which of the following equations correctly represents solving Q = 140 - 4P for P? O P 35-4Q O P = 140 - Q OP 140 - 4Q OP=35-1Q O P = 140+ Q Plot the relationship between P and Q on the following graph. Note: Price (P) is on the vertical axis and quantity (Q) is on the horizontal axis. PRICE 40 35 30 25 20 15 л 10 ?
A consumer has a budget set aside for entertainment during the year, and they spend the budget on concerts and plays. The consumer has a strong preference for attending concerts over plays: the two activities are substitutes, but not very strong substitutes. Sketch the indifference curves for this consumer on a graph, with concert tickets on the vertical axis and play tickets on the horizontal axis. Briefly explain why the consumer might ultimately choose to purchase a large number of play tickets, even though they have a strong preference for concerts. Include a budget line on your graph to illustrate this case.
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Suppose the marginal utiliy of a Coke is 15 utils and the price is $1. The marginal utility of a pizza is 20 utils and its price is $2. If you buy 1 unit each will you achieve consumer equilibrium? If not how can greater total equilibrium be obtained?
3. Balancing utility and price Suppose Teresa has to choose between purchasing plane tickets and milk. Which of the following is the utility-maximizing rule that Teresa should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Milk) x (Price of Milk) = (MU of Plane Tickets) x (Price of Plane Tickets) O MU of Milk = MU of Plane Tickets MU of Milk MU of Plane Tickets %3D Price of Milk Price of Plane Tickets MU of Milk MU of Plane Tickets = Price of Plane Tickets Price of Milk Since milk costs little and plane tickets are expensive, it must follow that when people choose their optimal quantities of milk and plane tickets to purchase, the marginal utility they receive from the last plane ticket they buy is v than the marginal utility they receive from the last gallon of milk they buy.
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For Gil, apples and pears are perfect substitutes; one apple is equivalent to one pear. Suppose, Gil has $15.00 per week to spend on these commodities and the price of an apple is $0.75 and the price of a pear is $1.00. a. What combination of apples and pears will Gil purchase to maximize his utility? b. Assume the price of apples increases to $1.25, while Gil's budget and the price of a pear remain unchanged. What combination of apples and pears will Gil purchase given this price change?