Demund and Supply c. ow are Brands x and z related? d. How are Brands z and y related? e. What is the market demand for Brand x? 51 2.8 Ycll- Yew-Boats, Ltd. produces Blue Mcanics. Consider the demand and shpply equations for Blue Meanies: O150-2P +0.00LM1.5P Q60+4P,-2.5W, where Q is monthly per family consumption of Blue Meanies, P, the price er unit of Blue Meanies, M median annual per family income ($25,000), P. the price per unit of Apple Bonkers ($5.00) and W the hourly per worker wage rate ($8.60) a. W at type of good is Apple Bonkers? b. Wat are the equilibrium price and quantity of Blue Meanies? C. Suppose that median per family income increases by $6,000. What are the new equilibrium price and quantity of Blue Meanies? d. Supose that in addition to the increase in median per family income, collective bargaining by Bluc Meanic Local # 1 results in a S.40 hourly increase in the wage rate. What are the new equilib- riu price and quantity? e. In saime diagram, illustrate your answers to parts b, c. and d. Cunsider the following demand and supply equations for sugar: 2.9 Q1,000 1,000 P; Q' =800 1,00OP. P is th price of sugar per pound and Q is the quantity of sugar in thousands of pounds. a. Wha are the equilibrium price and quantity for sugar? b. What is the value of net social welfare in this market? Suppose that the government subsidizes sugar production by placing a price floor of $0.20 per pound. What is the relationship between the quantity supplied and quantity demand for sugar? d. Wha is the cffect on social welfare as a result of the price floor? C. 2.10 Occiden al Pacific University is a large private university in California that is krown for its strong athletics program, especially in football. At the request of the Dean of the College of Arts & Sciences, a professor EBSCO eBook Collection (EBSCOnost) - printed on B/20/2019 7:18 AM via SHRI MATA VAISHNO DEVI UNIVERSITY AN: 935122 Webster, Thomas J... Nanager ial Economics: lools for Analyzing Business Strategy Account: ns176013.main.enost in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 52 Chapter 2 from the economics department estimated that student demand for student enrollment at the university is Q5.000 0.5P +0.1M+0.25P where Q, i the number of full-time students, P, tuition charged full- time stude ts per semester, M national income ($ billions), and P tuition cha ged full-time students per semester by Oriental Atlantie University in Maryland, Occidental's closest competitor on the grid iron. Suppos that full-time enrollment at Occidental is 4,000 students. If M7,500 and P charging its full-time students? b. The administration is considering a promotional campaign designed to bolster admissions and tuition revenues. The cost of the cam- paign will be $750,000. The economics professor believes that the promotonal campaign will increase demand to а. $6,000, how much tuition is Occidental 3 Q 5,100-0.45P +0.1M +0.25P If the e onomic professor is correct, forecast Occidental's full-time enrollment? c. Assuming no Orienta, will the promotional campaign be effective? (Hint: Com- pare Ocidental's tuition revenues before and after the promotional campaign.) d. The di ector of Occidental's athletic department claims that the increas in enrollment resulted from the football team's NCAA Division I national championship. Is this claim reasonable? How would t show up in the new demand equation? change in real GDP or full-time tuition charged by The market demand and supply equations for a good are: 2.11 Q =50-10P: Q' =20+2.5P. a. What i the equilibrium price and equilibrium quantity? b. What i the value of net social wellare? c. What i the effect on net social welfare if the go vernment imposes pricc ceiling of $3.00? Lexington Books. rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. orl applicable copyr ight taw.