Che table below shows the total benefit, in dollars, that Andrew derives from consuming two goods, cheeseburgers and Good J. Quantity of Cheeseburgers Total Benefit of Quantity of Good Total Benefit of Good Cheeseburgers J J $0 0. $0 1 $40 $30 2 $70 $50 $90 3 $65 4 $100 4 $75 5 $105 $80 6. $105 6. $83 Andrew has a limited weekly income of $65, and he spends it all on cheeseburgers and Good J. Assume the price of each. cheeseburger is $10 and the price of Good J is $5 per unit. (a) Calculate Andrew's consumer surplus from the second unit of Good J. Show your work. (b) Identify the quantity of cheeseburgers and the quantity of Good J that will maximize Andrew's total benefit given hi weekly income. Explain using marginal analysis. (c) If Andrew's weekly income increases from $65 to $75, would Andrew be able to buy 5 cheeseburgers and 6 units c Good J? Explain using numbers. d) Suppose the price of Good J decreases by 10% and Andrew buys 12% more of Good J and 8% more of Good S. B n this change, identify whether Good J and Good S are substitutes, complements, or not related. Explain using numE ) Suppose instead that cheeseburgers are produced in a perfectly competitive market and the price of beef, an input e production of cheeseburgers, decreases. If cheeseburgers are a normal good, will the quantity of cheeseburgers th Il maximize Andrew's total benefit increase, decrease, or stay the same? Explain.
Che table below shows the total benefit, in dollars, that Andrew derives from consuming two goods, cheeseburgers and Good J. Quantity of Cheeseburgers Total Benefit of Quantity of Good Total Benefit of Good Cheeseburgers J J $0 0. $0 1 $40 $30 2 $70 $50 $90 3 $65 4 $100 4 $75 5 $105 $80 6. $105 6. $83 Andrew has a limited weekly income of $65, and he spends it all on cheeseburgers and Good J. Assume the price of each. cheeseburger is $10 and the price of Good J is $5 per unit. (a) Calculate Andrew's consumer surplus from the second unit of Good J. Show your work. (b) Identify the quantity of cheeseburgers and the quantity of Good J that will maximize Andrew's total benefit given hi weekly income. Explain using marginal analysis. (c) If Andrew's weekly income increases from $65 to $75, would Andrew be able to buy 5 cheeseburgers and 6 units c Good J? Explain using numbers. d) Suppose the price of Good J decreases by 10% and Andrew buys 12% more of Good J and 8% more of Good S. B n this change, identify whether Good J and Good S are substitutes, complements, or not related. Explain using numE ) Suppose instead that cheeseburgers are produced in a perfectly competitive market and the price of beef, an input e production of cheeseburgers, decreases. If cheeseburgers are a normal good, will the quantity of cheeseburgers th Il maximize Andrew's total benefit increase, decrease, or stay the same? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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i need help with question b,c, d, and e (Show all your work)
Thank you!!
Transcribed Image Text:you must show how you arrived at your final answer.
The table below shows the total benefit, in dollars, that Andrew derives from consuming two goods, cheeseburgers and
Good J.
Quantity of
Cheeseburgers
Total Benefit of
Quantity of Good
Total Benefit of Good
Cheeseburgers
J
$0
$0
1
$40
1
$30
2
$70
$50
3
$90
3
$65
4
$100
4
$75
$105
$80
6
$105
6.
$83
Andrew has a limited weekly income of $65, and he spends it all on cheeseburgers and Good J. Assume the price of each
cheeseburger is $10 and the price of Good J is $5 per unit.
(a) Calculate Andrew's consumer surplus from the second unit of Good J. Show
your
work.
(b) Identify the quantity of cheeseburgers and the quantity of Good J that will maximize Andrew's total benefit given his
weekly income. Explain using marginal analysis.
(c) If Andrew's weekly income increases from $65 to $75, would Andrew be able to buy 5 cheeseburgers and 6 units of
Good J? Explain using numbers.
(d) Suppose the price of Good J decreases by 10% and Andrew buys 12% more of Good J and 8% more of Good S. Based
on this change, identify whether Good J and Good S are substitutes, complements, or not related. Explain using numbers.
(e) Suppose instead that cheeseburgers are produced in a perfectly competitive market and the price of beef, an input to
the production of cheeseburgers,decreases. If cheeseburgers are a normal good, will the quantity of cheeseburgers that
will maximize Andrew's total benefit increase, decrease, or stay the same? Explain.
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