The following graph shows Alyssa's weekly demand for apple pie, represented by the blue line. Point A represents a point along her weekly demandcurve. The market price of apple pie is $1.25 per slice, as shown by the horizontal black line.Alyssa's Weekly Demand2.50Demand2.252.001.751.50Price1.251.000.750.500.250.+0.246.8.1012141618QUANTITY (Slices of apple pie)From the previous graph, you can tell that Alyssa is willing to pay $for her 8th slice of apple pie each week. Because she has to pay only$1.25 per slice, the consumer surplus she gains from the 8th slice of apple pie is $PRICE (Dollars per slice)20 Suppose the price of apple pie were to fall to $1.00 per slice. At this lower price, Alyssa would receive a consumer surplus of $from the 8thslice of apple pie she buys.The following graph shows the weekly market demand for apple pie in a small economy.Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of apple pie is $1.25 per slice. Then, usethe green point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $1.00 per slice.Small Economy's Weekly Demand2.50Demand2.25Initial Consumer Surplus (P = $1.25)2.001.751.50Additional Consumer Surplus (P = $1.00)P = $1.251.251.00P = $1.000.750.500.2520406080100120140160180200QUANTITY (Thousands of slices of apple pie)PRICE (Dollars per slice)

When a customer purchases a good for less money than they would typically be prepared to pay, this…

From the previous graph, you can tell that Alyssa is willing to pay $ for her 8th slice of apple pie each week. Because she has to pay only $1.25 per slice, the consumer surplus she gains from the 8th slice of apple pie is $

From the previous graph, you can tell that Alyssa is willing to pay $ for her 8th slice of apple pie each week. Because she has to pay only $1.25 per slice, the consumer surplus she gains from the 8th slice of apple pie is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

In the past, Andy received a university scholarship of Rp2,000,000 per month to purchase textbooks (B) and daily needs (L). At that time, Andy maximized his utility by spending Rp500,000 for textbooks and Rp 1,500,000 for daily needs, Now graphically show the allocation of the scholarship that maximized Andy's utility (B on the horizontal axis and L on the vertical axis) and interpret it!
Suppose the Australian Government subsidises housing expenditures of low-income families by providing a three dollar-for- dollar subsidy to a family’s housing expenditure. The Walid family qualify for this subsidy and spend a total of $1,000 per month on housing (they spend $250 of their own and receive a government subsidy of $750). Recently, a new policy has been proposed that would provide each low-income family with a lump sum transfer of $750, which can be used for housing or other goods. Using a graph, demonstrate whether the Walid family would prefer the current program, the proposed program or would be indifferent between the two. Explain your results. Please do fast ASAP fast
A common marketing tactic among many liquor stores is to offer clientele quantity (or volume) discounts. For instance, the second-leading brand of wine exported from Chile sells in the United States for $15 per bottle if the consumer purchases up to eight bottles. The price of each additional bottle is only $8. If a consumer has $200 to divide between purchasing this brand of wine and other goods, graphically illustrate how this marketing tactic affects the consumer's budget set if the price of other goods is $1. Assuming a consumer has standard indifference curves (i.e.,resembling those in Figure 4-2), will she ever purchase exactly 8 bottles of wine?
1) Sharon spends her time (20h) between leisure (L) and work and he consume Y product from his working income (Py=1). Assume that she gets W$ per hour of working and has the following utility function: U (L, Y)=LY+2L a. b. C. Calculate the demand function for L and show it on a graph (L vs W). Calculate the labor supply (H) and show it on a graph (H vs W). What will happen to L, Y and H if the wage per hour (W) will decrease? =
1.1 Derive the marginal utility of good X (MUx) and marginal utility of good Y (MUy) from the utility function: U = f(x; y) = x²y³ - 10x using partial differential calculus. 1.2 Derive the MPL and MPK equations, if TP = f (L; K) = 10L² +20L²K² +3K² using partial differential calculus.
Explain why the lifetime budget constraint must be satisfied as a strict equality
Maria can work up to 40 hours per week at Sparkle, one of many competitive firms that make and sell hand-crafted jewelry and pay $25 per hour. The budget constraint below shows the tradeoff that she faces in terms of earnings versus leisure each week. S earnings $1,000 Maria's weekly budget constraint 40 leisure (hours)
Jones, without a job or job prospects, has been on social assistance for the past four months. Social assistance pays a basic benefit of $600 a month with a benefit reduction rate of 75 percent for earned income. Her welfare benefit is given as B = 600 - 0.75E, where E represents monthly earnings. Jones has just been offered a part-time job working 5 hours a day, 5 days a week, earning an hourly wage of $11. Sketch a budget constraint for Jones given the social assistance scheme in place and the wage rate available for part time work. How much income would she earn if she accepted the job? Would Jones still be on social assistance if she took the job? Draw the budget constraint.
Marvin has a Cobb-Douglas utility function, 0.5 0.5 U= 91 92 his income is Y = $900, and initially he faces prices of p₁ = $1 and p2 = $4. If p₁ increases from $1 to $2, what are his compensating variation (CV), change in consumer surplus (ACS), and equivalent variation (EV)? Marvin's change in consumer surplus (ACS) is $ minus sign if necessary.) Marvin's compensating variation (CV) is $. (Enter your response rounded to two decimal places and include a minus sign if necessary.) (Enter your response rounded to two decimal places and include a Marvin's equivalent variation (EV) is $. (Enter your response rounded to two decimal places and include a minus sign if necessary.)
The graph below shows David’s preferences for leisure and consumption. Draw three budget constraints in the graph below. One if David’s wage is $10 per hour (BC1), another if his wage is $20 per hour (BC2) and a third for if his wage is $30 per hour (BC3). Show the optimal combination of leisure and consumption for each of the three budget constraints. Label the optimal amount of Leisure, L1, L2 & L3, and label the optimal amounts of consumption C1, C2 & C3.
Mark can work up to 80 hours each week at a pre-tax hourly wage of $20 but faces a constant 20 percent tax on his earnings. Thus, Mark maximizes his utility by choosing to work 50 hours per week. The government proposes a negative income tax whereby everyone is given $300 per week and anyone can supplement their income further by working. To pay for the negative income tax, tax on earnings will be increased to 50 percent. On a single graph, draw Mark's original budget line and his budget line under the negative income tax. Show that Mark will work fewer hours if the negative income tax is implemented Will Mark's utility be greater under the negative income tax? Discuss your answer.
Caroline and Alana are 2 sisters who live in a village called Deadend where no work is available. To go to the nearest city where jobs are available, they need to buy a bus pass for $50 dollars a week. Both receive an allowance of Yn from their parents. Illustrate in two different graphs Caroline and Alana’s s situations in the following two cases: Caroline’s preferences are such that she optimally decides to stay home receiving her parents’ allowance of Yn given the wage rate available in the nearest city and the cost of the bus pass. Alana’s preferences are such that she optimally chooses to commute and work h* given the wage rate and the cost of the bus pass and Yn. PLEASE JUST DRAW GRAPH NO EXPLANATION NEEDED