As we learned in the video, Sheldon is trying to decide between purchasing an XBox and purchasing a PlayStation. Each system has its pros and cons.Sheldon is willing to pay up to $300 for the XBox, which costs $249. He is willing to pay up to $500 for the PlayStation, which costs $499. Regardlessof which game system he buys, Sheldon plans to purchase a third-party warranty for $20. Let's calculate Sheldon's opportunity cost of purchasingeach system.V3rd attemptPart 1What is Sheldon's opportunity cost if he buys the XBox? $Part 2What is Sheldon's opportunity cost if he buys the PlayStation? $See HintSee Hint

Opportunity cost refers to the cost of the foregone opportunity. It is the profit foregone when a…

As we learned in the video, Sheldon is trying to decide between purchasing an XBox and purchasing a PlayStation. Each system has its pros and co Sheldon is willing to pay up to $300 for the XBox, which costs $249. He is willing to pay up to $500 for the PlayStation, which costs $499. Regard of which game system he buys. Sheldon plans to purchase a third-party warranty for $20. Let's calculate Sheldon's opportunity cost of purchasing each system. 3rd attempt Part 1 What is Sheldon's opportunity cost if he buys the XBox? $ Part 2 What is Sheldon's opportunity cost if he buys the PlayStation? S See Hir See Hint

As we learned in the video, Sheldon is trying to decide between purchasing an XBox and purchasing a PlayStation. Each system has its pros and co Sheldon is willing to pay up to $300 for the XBox, which costs $249. He is willing to pay up to $500 for the PlayStation, which costs $499. Regard of which game system he buys. Sheldon plans to purchase a third-party warranty for $20. Let's calculate Sheldon's opportunity cost of purchasing each system. 3rd attempt Part 1 What is Sheldon's opportunity cost if he buys the XBox? $ Part 2 What is Sheldon's opportunity cost if he buys the PlayStation? S See Hir See Hint

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.12P

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1. Jack is considering selling his elliptical machine, which he never really used, is high quality, and has been taking up space in his spare bedroom. He lists it on Facebook Marketplace for "$1,200 or best offer" but in reality won't sell it for less than $1,000. Lina is looking to purchase a used elliptical machine. For a high-quality elliptical, she is willing to pay up to $1,300, and for a low-quality elliptical, she is willing to pay $600. Lina is risk neutral but she cannot tell if the elliptical machine is high quality or low quality. If she believes that 60% of used elliptical machines are high quality and 40% are low quality, what is the maximum price that Lina would be willing to pay? Would Jack agree to this price?
Donuts are a big thing in Portland, OR. You go into one of the many donut establishments to purchase some number of these tasty (and even vegan or gluten free if required) treats. Let's say that the first donut has higher utility for you, so you are willing to pay up to $2 for it. For the second donut you are willing to pay $1.50, the third $1, a fourth $0.50 and the fifth $0.00. This particular bakery in Portland charges an average of $1 per donut. If you are a rational buyer (which can be hard when faced with so many different delicious donuts) then how many donuts do you purchase, and how much consumer surplus (i.e., money saved compared to what you were willing to spend) do you have? O 4 donuts, $5 O 2 donuts, $5 O 3 donuts, $1.50 O 1 donut, $0.50
Stan Moneymaker needs 15 gallons of gasoline to top off his automobile’s gas tank. If he drives an extra eight miles (round trip) to a gas station on the outskirts of town, Stan can save $0.10 per gallon on the price of gasoline. Suppose gasoline costs $3.90 per gallon and Stan’s car gets 25 mpg for in-town driving. Should Stan make the trip to get less expensive gasoline? Each mile that Stan drives creates one pound of carbon dioxide. Each pound of CO2 has a cost impact of $0.02 on the environment. What other factors (cost and otherwise) should Stan consider in his decision making?
Anderson is facing the hardest decision in his life: Should he buy the newest Xbox Series X (cost $500), the newest Apple Airpod Max (cost $550), or the newest Apple Mac Pro Wheels Kit (cost $700). Right now, Anderson has exactly $700. Provided that Anderson already has EVERYTHING he needs and the $700 cannot be used on anything else to make him happier (in other words, the $700 should only be spent on these 3 items. Moreover, for example, if Anderson chooses to buy the Xbox for $500, the remaining $200 is not usable and has no value to Anderson). 1/ If Anderson chooses to buy the Airpod Max, what is the opportunity cost associated with that option? 2/ How would your answer in 1/ change if Anderson just won the $1 million lotteries today? 3/ How would your answer in 1/ change if Anderson just lost one of his $100 bill today, making him now only has $600 left?
Concert Tickets You are selling seats at an upcoming concert. The concert hall has a total of 8,500 seats, which will include reserved seats and general admission seats. You're selling reserved seats for $9 each and general admission seats for $5 each and are trying to decide how many of each kind of seat to offer. You want to make money on the concert, but also want people who can't afford the more expensive seats to come. You estimate your expenses for putting on the concert to be $50,000. You are hoping to make a profit, or at least break even. Assuming that you sell out the concert: a. Determine an equation for your revenue and profit as a function of the number of reserved seats you offer. b. Graph your revenue and profit equations on the same graph. What do you notice about the two functions? What does the slope of the lines represent in this situation? c. Determine how many reserved seats you would need to offer in order to break even. d. Determine how many reserved seats must…
Assume you have your car broken down just before the weekend. You value your weekend trip as much as v and if you have to stay home you get the zero utility. There are two dealerships in your town. At the beginning of the day they simultaneously choose a price for repair. Dealers know that when you come to one of them and observe the price, you can always call to another dealer to make an inquiry about his price. The call is costless. The other dealer, however, can be occupied for this day. Assume, this happens with probability a which is a common knowledge (but the dealers do not know whether the other dealer is occupied or not). Assume zero repair cost for the dealer and find a symmetric equilibrium of the game.
1. Alizeh and Kelly were traveling together and have gotten stranded at an airport overnight. They have no cash, but they did both think to bring granola bars and turkey sandwiches with them. They currently each have several granola bars and a few sandwiches. Alizeh announces that she'd be willing to give up a granola bar for one turkey sandwich. Kelly responds that turkey sandwiches are bigger than granola bars so she would be willing to give up a granola bar if she could get half a turkey sandwich. Is Kelly and Alizeh's current allocation of granola bars and turkey sandwiches efficient? Explain why or why not. (Note that you cannot rely on a rule here – you have to specifically explain why the allocation does or does not meet the definition of an efficient allocation.)
On your way home from Super Groceries, your car breaks down. It is a hot summer day and you have nobody to call. With little time before the food spoils, you decide to prioritize what to carry on the walk home. You choose to take three items with you. Since you will need all five items today, you will replace the two abandoned items at the corner store near your house, Convenient Grocers. The table contains the prices you paid for each good at Super Groceries and the prices you will need to pay at Convenient Grocers to replace the goods. Which three items should you save? OOOOO vegetables fruits eggs ham milk Item milk eggs ham vegetables fruits Price at Super Groceries $3.75 $3.80 $2.95 $3.80 $2.50 Price at Convenient Grocers $4.25 $2.95 $5.25 $3.05 $3.80
Sean is arguing with his girlfriend, Yvette. They have been going out for a little more than two years. YVETTE: I'm leaving you, Sean. Get over it. SEAN: Are you saying that being single will make you happier than you've been with me? Speaking personally, I think the utility we've had in this relationship was much more than you could have had if you'd been single this whole time! YVETTE: I had taken an economics class and the word "utility" rings a bell. It's not that at all. We've had a fine time. It's that the utility I would get by continuing our relationship isn't worth it anymore. SEAN: I've never been dumped by someone citing the law of before. You're a piece of work, you know that? Yvette doesn't hear. She has already walked off, leaving Sean feeling like something of a sunk cost.
You are in the market for a new couch and havefound two advertisements for the kind of couchyou want to buy. One seller notes in her ad that sheis selling because she is moving to a smaller apartment, and the couch won’t fit in the new space.The other seller says he is selling because the couchdoesn’t match his other furniture. Which seller doyou expect to buy from? Why? ( Hint: Think whowould be the more motivated seller.)
Peter and Cindy each had some money at first. Peter started spending $1.20 daily. After 15 days, Cindy started spending 1 2/3 of what Peter spent daily. When CIndy spent all of her money, she had spent $11.60 more than Peter. a) How many days did Cindy take to spend all of her money? b) How much did Peter spend in total when Cindy spent all of her money?
Freddie sees a watch for sale in the window of a shop with a price tag of $50 attached. Explain whether this is an offer or an invitation to treat