Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility from owning a toothbrush, but for the consumption of every tube of tooth paste he gains a utility of 2 utils – but only if he owns a tooth brush. Without a tooth brush, Andrea gains no utility from consuming tooth paste. In addition, after consuming 10 tubes of tooth paste, a toothbrush needs to be replaced, i.e., Andrea needs to buy a new one. The current price of tooth brushes on the market is £5 and the current price for tooth paste is £1 per tube. Assume that Andrea aims to maximise consumer surplus. a) In a graph, draw total utility as a function of number of toothpaste tubes, assuming that Andrea buys 1 tooth brush. b) How many tubes will Andrea buy if he wants to maximise consumer surplus, assuming that Andrea can buy any amount of tooth brushes? What is Andrea's total consumer surplus? c) How many tubes will he buy if the current price is £0.50 per tube?

Q: Suppose the government budget deficit increases, changing the equilibrium quantity demanded for…

A: A firm demands capital based on the following rule:  per unit cost of capital = value of output…

Q: Question 4

A: It is given that at current price, the quantity demanded is equal to 400 units and the quantity…

Q: A firm in a perfectly competitive industry is currently producing 1,400 units per day at a total…

A: A perfect market, also known as an atomistic market in economics, is defined by several idealising…

Q: e table shows the average income of households and the quantity demanded of products M and N at…

A: Solutions for sub-parts a, b and d: Price elasticity of demand measures the responsiveness in…

Q: 2- The demand function for sugar is given by the function: Qd=30-0.6P. Find Qd for: a- P=5 b- P=15…

A: Demand is defined as the quantity of a good or a service which the consumers would be willing and…

Q: 6. Suppose the Fed decided to purchase $60 billion worth of government securities on the open…

A: The Federal Reserve can impact the cash supply and interest rates through its buy and offer of…

Q: d. Using the two prices and quantities for X, derive a demand schedule (a table showing prices and…

A: Demand and supply In an economy there is always a demand for goods and services and the supply of…

Q: Question 1 Bob. Ann north Consider the following sequential-move game between Ann and Вов south…

A: The sequential move game for Ann and Bob is given as follows.The probability of Nature for choosing…

Q: 3. The table below shows data for Germany including real GDP (in billions of euros) and the price…

A: GDP or gross domestic product is the sum of the value of all end commodities produced within the…

Q: 2. Consider the following 3-player game where each player has 3 strategies. Player 1 decides up,…

A: A pure strategy Nash Equilibrium signifies the chosen strategy at which none of the players…

Q: 3. The inverse demand a monopoly faces is p = 100 - Q+ VA, where A is the level of advertising. The…

A: We are going to use two-variable profit maximisation technique to answer this quesiton.

Q: [2] Consider a pricing game with strategies and payoffs as shown in the table below. Firm B Low…

A: Nash equilibrium is a concept in game theory that represents a stable outcome in a game where each…

Q: The graph shows the market for flashlights when the government imposes a tax of $6 per flashlight on…

A: Meaning of Tax Imposition:The term tax imposition or the tax hike refers to the situation under…

Q: Three stocks have share prices of $20, $10, and $30 with total market values of $400 million, $350…

A: Price weighted index is the average of prices of stocks. The price of stock has strong influence on…

Q: 100.00 90.00 80.00 70.00 MC 60.00 50.00 40.00 ATC 30.00 20.00 10.00 MR 300 Quantity (rooms per day)…

A: Monopolistic competition is the market structure where large numbers of buyers and seller exist…

Q: Question 4

A: The producer surplus is the area of the triangle above the supply curve at the given price. The…

Q: The short-run quantity of output supplied by firms will fall short of the natural level of output…

A: The SW theory estimates that the worker's pay will in general answer to changes in organization…

Q: Question 4

A: The minimum price imposed by the government at which producers can sell output is known as price…

Q: Discount rate Instructions (a) Calculate the net present value of the project. (b) To gange the

A: According to Bartleby's policy, we are supposed to answer only the first questions if multiple…

Q: The equilibrium wage and quantity are W*=10 and Q*=40. a. Consider a minimum wage of W=$8. What will…

A: Since you have asked specifically to solve sub-parts c to f, providing you with the same.  In a…

Q: 1. Assume two countries, the U.S (US) and Japan (J), have one good: cars. Thedemand (d) and supply…

A: Note:- Dear learner you have posted a question with multiple sub parts, you have asked for the part…

Q: Question 2

A: The quantity demanded can be calculated by the intersection of the demand curve and the price line…

Q: 1. The U.S. price of corn is $100 per ton, and the exchange rate between the U.S.dollar and the…

A: "Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Which of the following causes an increase in short-run aggregate supply (SRAS)? The price level…

A: The whole supply of goods and services produced within an economy at a certain overall price in a…

Q: Consider the graph, which depicts a single competitive firm hat wishes to maximize profits given its…

A: The perfectly competitive market decides the price and individual firm does not have control over…

Q: 7. Work It Out. Consider an economy with two sectors: manufacturing and services. The demand for…

A: Labor Demand is the demand that firms and companies make to meet the labor requirements that arise…

Q: 4. Monopolistic Competition and Oligopoly a. Briefly discuss how differentiated products in a…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: D. NET EXPORTS=NX=_ E. GDP= F. COMPUTE THE SHARES OF EACH OF THE FOUR MAIN CATEGORIES IN GDP

A: Following the above question which is solved and using the below formula we will get the answers: Y…

Q: 4. John has to choose between two jobs: one that offers him $50 per hour and one that offers $35 per…

A: Opportunity cost of choosing one activity over another activity is the benefit associated with the…

Q: given by Q = 500 – P, where P is the price on the market. Q is total market output, i.e., Q = QA +…

A: In a cournot equilibrium each firm chooses its output given the decision of other firm.

Q: for a firm that operates in a perfectly competitive market. a. What level of output should this firm…

A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…

Q: For each of the following scenarios, state whether the unemployment is frictional, structural or…

A: Frictional unemployment is the one that occurs from the inevitable time delays in finding new…

Q: $2,140 Evan's Hat Store sells hats in a perfectly competitive market with a downward sloping demand…

A:

Q: A monopolist with demand curve p = 1-q produces with a cost technology C(q) = 0.2q (constant…

A: Monopolist demand curve; p= 1−q Cost of technology; C(q)= 0.2q Equilibrium Quantity and Price At…

Q: BREAK-EVEN ANALYSIS The Warren Watch Company sells watches for $26, fixed costs are $155,000, and…

A: Given information: The price of a watch is $26 The fixed cost is $155,000 The variable cost is $13…

Q: Consider each of the following items. Should it be counted as part of U.S. GDP? If so, in which…

A: GIVEN   Consider each of the following items. Should it be counted as part of U.S. GDP

Q: The table below shows the price of inputs and the price of outputs at each step in the production…

A: Expenditure method

Q: 3. Explain yield curve inversion. How could the yield curve inversion occur?

A: A yield curve refers to a graph that displays the yields of bonds at various maturities.The return…

Q: $220,000. The quantity demanded goes down from 6,500 units to 4,200 units. a. (2 points) Calculate…

A: Elasticity of demand is a measure of how sensitive the quantity demanded of a good or service is to…

Q: Question 2

A: In the short run, marginal cost is the supply curve for a firm and the marginal benfit curve is the…

Q: Which of the following is not included in the gross domestic product (GDP) of Germany? The value of…

A: GDP is the value of final goods and services produced in the country.

Q: Could you please answer questions d and e.

A: Robert Solow created the Solow model, commonly referred to as the neoclassical growth model, in the…

Q: • 1) The San Diego Zoo is contemplating a stuffed panda bear advertising promotion. Annualized sales…

A: 1) Quantity demanded in economics refers to the total measure of a service or item which consumers…

Q: The equilibrium price is $a loaf. The equilibrium quantity is loaves a day.

A: Equilibrium is the point where quantity demanded is equal to quantity supplied. QUANTITY DEMANDED =…

Q: d. What is the change in total revenue for business travelers when the price increases to $500? $

A: The aggregate monetary value obtained by a firm within a designated timeframe through the sale of…

Q: please answer parts c,d and g

A: In order to answer the given questions, we first reproduce the given diagram.

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.