Consider Becker's Time and Money Prices model and how it applies to waiting in lineups. Richard spends 24 hours a day studying and working in the psychology labs. He also drinks a lot of coffee. Richard's utility function is U = SC. The job in the labs pays $24 per hour; he has no non-labour income. Coffee has a money price of $2.00 per cup but there is also a 15-minute lineup at Tim Horton's and these time prices contribute to the total price he pays for coffee. Studying has no money price, but the time price of studying is 1.0; one hour of studying costs one hour of his time. Assess how much time Richard will spend drinking coffee, studying and working. а. Provide a labelled Indifference Curve diagram to illustrate his choices for C (horizontal) and S (vertical). Tim Horton's offers a V.I.P. Coffee Club. The price of coffee is still $2.00 a cup but there are no lineups for a member. What is the most that he would pay to join this club? What happens to the amount of b.

Consider Becker's Time and Money Prices model and how it applies to waiting in lineups. Richard spends 24 hours a day studying and working in the psychology labs. He also drinks a lot of coffee. Richard's utility function is U = SC. The job in the labs pays $24 per hour; he has no non-labour income. Coffee has a money price of $2.00 per cup but there is also a 15-minute lineup at Tim Horton's and these time prices contribute to the total price he pays for coffee. Studying has no money price, but the time price of studying is 1.0; one hour of studying costs one hour of his time. Assess how much time Richard will spend drinking coffee, studying and working. а. Provide a labelled Indifference Curve diagram to illustrate his choices for C (horizontal) and S (vertical). Tim Horton's offers a V.I.P. Coffee Club. The price of coffee is still $2.00 a cup but there are no lineups for a member. What is the most that he would pay to join this club? What happens to the amount of b.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

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Learning Journal prompt: For Unit 4 Learning Journal, you will use the marginal utility formula to choose between two products. Catherine is having dinner at the Yellow Restaurant. She wants desert after eating her entree. She is trying to decide between a cookie or a slice of pie. The cost of a cookie is $5 and the cost of a slice of pie is $8. Refer to the Unit 4 Learning Journal Marginal Utility spreadsheet Compute the marginal utility for cookie and slice of pie Compute the marginal utility per dollar What is the utility maximizing choice for a cookie and slice of pie? Explain what the utility maximizing choice means. Discuss how you could use marginal utility to make consumer choices
1. * Refer to the information provided in table below. MU/P for Number of Cinema Tickets Total Utility Marginal Utility Price of a Cinema Ticket Cinema Tickets 140 240 3 330 400 440 6. 470 MU/P for Number of Concert Tickets Total Utility Marginal Utility Price of a Concert Ticket Concert Tickets 240 440 3 600 720 800 6. 850 If the price of a cinema ticket is 20 TL, the price of a concert ticket is 40 TL and the a. income is 120 TL, draw the budget line. b. Find marginal utility for each consumption level for both products and show your work in Table. Find the utility maximizing level of consumption bundle if the income of the C. consumer is 120 TL. Show the utility maximizing level of consumption for each product on the table. Explain your answer by stating the utility maximizing rule.
Consider the two questions about utility. The table refers to the first question only. Tod loves to travel, and he takes several river cruises per year. The table contains information about the utility Tod gets from the river cruises. Number of river cruises Total utility Marginal utility 0 0 1 12 12 2 20 8 3 25 5 From this information, it can be concluded that the number of river cruises Tod takes is indeterminable without knowing Tod’s income or the price of the cruises. that total utility is maximized when Tod takes one river cruise. that Tod will take two river cruises. that Tod will take three river cruises. Suppose that Jim has $4 to spend on a snack and that the only thing available is tea and scones. Jim’s marginal utility of the first cup of tea is 30 and his marginal utility of the second cup of tea is 20. Each cup of tea costs $1. Jim’s marginal utility of the first scone is 80 and his marginal utility of the second scone is 60. Each scone costs…
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Answer all 3 parts plz. Cole splits his time between running and acting. He makes $10/hr for acting. Cole loves running so he thinks its the same as having fun. Part a) Cole acts 4 hours each day. This is his utility maximizing choice. Draw this on a graph (with hours of fun, which is running per day on the x axis, and income per day on the y-axis). Make sure to label all of the curves. Part b) Cole gets a bigger role for acting and his wage goes to $20/hr for acting. He acts 2 hours every day now. Show this change on the graph and illustrate the income and substituion effect on the graph. Which one is dominating? Explain. Part c) Cole earns a grant that gives him an additional $15 per day on top of his wage of $20/hr. Show this change on your graph. Will Cole most likely act more hours or less hours per day? Explain.
nments: 2022-SU-ECO2023 x apter 7 Problems 1 eBook https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheduca Question 1 - Chapter 7 Problem: X Mc Graw Hill Type here to search Suppose that at three units purchased, marginal utility is $8 and total utility is $30. If the marginal utility of the fourth unit purchased is $6, how much is the total utility of four units? Marginal ultility: $ im o Et Soved Prey 1 of 5 Nex
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For Unit 4 Learning Journal, you will use the marginal utility formula to choose between two products. Catherine is having dinner at the Yellow Restaurant. She wants desert after eating her entree. She is trying to decide between a cookie or a slice of pie. The cost of a cookie is $5 and the cost of a slice of pie is $8. Refer to the Unit 4 Learning Journal Marginal Utility spreadsheet Compute the marginal utility for cookie and slice of pie Compute the marginal utility per dollar What is the utility maximizing choice for a cookie and slice of pie? Explain what the utility maximizing choice means. Discuss how you could use marginal utility to make consumer choices
If this consumer has $11.00 to spend on cans of beer and slices of pizza in any given week, then would consuming a combination of 6 beers and 8 pizzas maximize the consumer's utility? If not, what would the consumer have to do to maximize their utility from consumption of these two goods?
Suppose Coke and Pepsi are perfect substitutes for me, and right and left shoes are perfect complements. A. Suppose my income allocated to Coke/Pepsi consumption is $100 per month, and my income allocated to right/left shoe consumption is similarly $100 per month. a. Suppose Coke currently costs $0.50 per can and Pepsi costs $0.75 per can. Then the price of Coke goes up to $1 per can. Illustrate my original and my new optimal bundle with "Coke" on the horizontal and "Pepsi" on the vertical axis. b. Suppose right and left shoes are sold separately. If right and left shoes are originally both priced at $1, illustrate (on a graph with "right shoes" on the horizontal and "left shoes" on the vertical) my original and my new optimal bundle when the price of left shoes increases to $2. c. True or False: Perfect complements represent a unique special case of homothetic tastes in the following sense: Whether income goes up or whether the price of one of the goods falls, the optimal bundle…