d. 3/5QUESTION 19Tim loves to collect Lego architecture sets.. Suppose that Tim's willingness to pay for different Lego sets is given below:SetWillingness to PaySears Tower40Hancock Center70FallingwaterShanghai10080Robie House80If each lego set is sold separately at a price of $50, what is Tim's CS?a. 160b. 120c. 150d. 130QUEETION 20O0O0

Willingness to pay is the maximum price that a consumer is willing to pay for a good. Consumer…

Answered: QUESTION 19 Tim loves to collect Lego…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 4SCQ: As a college student you work at a part-time job, but your parents also send you a monthly...

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Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get Disceunted prie to some stores than others. For Marked p price example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $102 for the skirt: anita's office Original pre Travel Time Each Way Price of a Skirt (Dollars per skirt) Store Local Department Store (Minutes) 15 102 Across Town 30 85 Neighboring City 60 76 Juanita makes $42 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $42 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Complete the following table by computing the opportunity cost of…
Alda is willing to pay $2,000 to visit her favoritecousin over spring break. A month ago, she bookeda trip costing $1,200. Spring break has arrived, butAlda needs one day to finish an important paperbefore she goes. Alda could cancel her trip and geta refund of $800. Or, she could pay an additional$1,000 (on top of the $1,200 she already paid) torebook the trip for two days later. Explain whatAlda should do.
Jacob is a Lego maniac, but he also likes Super Soaker squirt guns. The following table shows Jacob's total utility and marginal utility from Legos and squirt guns measured in utils: Quantity of Legos 0 1 2 3 4 5 TU 0 20 37 50 60 65 MU MU/P 20 17 13 10 5 Quantity of Squirt TU Guns 0 1 2 3 4 5 0 50 75 90 100 102 MU 50 25 15 10 2 MU/P a. Suppose the price of Legos is $5 per set and the price of a squirt gun is $8 per gun. Compute the marginal-utility-to-price ratios for Legos and squirt guns and enter these values in the table. b. How many sets of Legos and how many squirt guns will Jacob purchase if he has $26 to spend? Carefully explain how you arrived at your answer. c. Now suppose the price of Legos falls to $2.50 per set while the price of squirt guns stays the same. How many sets of Legos and how many squirt guns will he purchase? Show how you arrived at your answer. d. Draw Jacob's demand curve for Legos between the prices $5 per set and $2.50 per set. Why does it have a negative…
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ceriuppose that Isaiah has a weekly fixed budget and spends it all on haircuts and ice cream. At his current combination arof consumption, the marginal utility of the last dollar spent on haircuts is greater than the marginal utility of the last dollar spent on ice cream. Has Isaiah maximized his utility? A C E Yes, because changing his current consumption combination will reduce his total utility B No, because he can increase his total utility by purchasing more haircuts and D fewer ice creams Yes, because he has purchased 2 goods in proportion so that he can get- the maximum utility from each Yes, because he purchased the maximum possible with a limited budget No, because he can increase his total utility by purchasing fewer haircuts and more ice creams
The following is Ray Windmill White’s total utility schedule for pairs of boxing gloves. Calculate the marginal utility schedule. If boxing gloves sell for 60 dollars a pair, how many will Windmill purchase? What decision rule did you use? Pairs of Boxing Gloves/year Total Utility 0 0 1 $180 2 300 3 390 4 460 5 515 6 565 7 580 8 595
Consider the following table, which listsJames’s marginal utility schedule for steak andhamburger meals: Given a budget of $45, how many steak and hamburgermeals will James buy per month to maximizehis total utility? What is the total utilityrealized?
Suppose the price of Xylophones is $3 and the price of Yoyos is $7. Robin's marginal utility of Xylophones is 15 and the marginal utility of Yoyos is 21. In order to maximize utility, Robin should O Buy fewer Xylophones and fewer Yoyos O Buy fewer Xylophones and more Yoyos Buy fewer Yoyos and more Xylophones Continue to buy the same number of Xylophones and Yoyos.
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?
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.

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