Suppose that you are trying to determine whether or not your friend Cho views a loaf of bread as a necessity, a luxury, or in between a necessity and a luxury. Cho has a weekly income of $40 to spend on either bread or other consumption. The price of bread is $5 per loaf, and the vertical axis is treated as a composite good representing dollars spent on other consumption. On the following graph, use the blue line (circle symbol) to graph Cho's budget constraint (BC). Then, place the black point (plus symbol) on the graph to indicate the best bundle in this case. Note: Dashed drop lines will automatically extend to both axes. OTHER CONSUMPTION (Dollars per week) 100 8 90 80 2 2 2 2 2 2 2 0 0 1 2 3 5 • BREAD (Loaves per week) Now, suppose that Cho's weekly income increases to $50. True According to the previous graph, a loaf of bread is True or False: Cho's preferences exhibit homotheti False 8 10₂ 10, 10 BC, + Use the green line (triangle symbol) to graph the new budget constraint (BC). Then, place the grey point (star symp) on the graph to indicate the new best bundle. 1 a luxury Initial Best Bundle New Best Bundle in between a necessity and a luxury a necessity

Suppose that you are trying to determine whether or not your friend Cho views a loaf of bread as a necessity, a luxury, or in between a necessity and a luxury. Cho has a weekly income of $40 to spend on either bread or other consumption. The price of bread is $5 per loaf, and the vertical axis is treated as a composite good representing dollars spent on other consumption. On the following graph, use the blue line (circle symbol) to graph Cho's budget constraint (BC). Then, place the black point (plus symbol) on the graph to indicate the best bundle in this case. Note: Dashed drop lines will automatically extend to both axes. OTHER CONSUMPTION (Dollars per week) 100 8 90 80 2 2 2 2 2 2 2 0 0 1 2 3 5 • BREAD (Loaves per week) Now, suppose that Cho's weekly income increases to $50. True According to the previous graph, a loaf of bread is True or False: Cho's preferences exhibit homotheti False 8 10₂ 10, 10 BC, + Use the green line (triangle symbol) to graph the new budget constraint (BC). Then, place the grey point (star symp) on the graph to indicate the new best bundle. 1 a luxury Initial Best Bundle New Best Bundle in between a necessity and a luxury a necessity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A doctor's office staff studied the waiting times for patients who arrive at the office with a request for emergency service. The following data with waiting times in minutes were collected over a one- month period. a. Fill in the frequency values below. Waiting Time Frequency 49 11 16 4 2 3 18 11 7 9 8 12 24 7 8 7 13 19 5 4 0-4 5-9 8 4 10-14 15-19 3 20-24 1 Total 20 b. Fill in the relative frequency (2 decimals) values below. Waiting Time Relative Frequency 0.2 0-4 5-9 0.4 0.2 10-14 15-19 0.15 20-24 0.05 Total 1
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Revenue and Costs ($) TC P61 Given TFC = $40.00 Q1 = 30.00 Q2 = 40.00 TR P6 P5 Q3 = 50.00 Q4 = 80.00 Q5 = 86.00 P4. P1 = $40.00 P2 = $50.00 P3 = $60.0o P4 = $150.00 P5 = $200.00 P6 = $210.00 P61 = $320.00 P3 P2 P1 Q1 Q2 Q4 Q5 Q3 Exhibit TR-TC Output (Q) Refer to Exhibit TR-TC for a typical competitive firm. At an output level of Q5, the firm's losses is about O $100.00 O $90.00 O $110.00 O $120.00