True or false: keeping his maximum willingness to pay for a yacht in mind, Tim will buy the yacht because it will be worth more to him than its market price of $350,000 2. Individual demand and consumer surplusConsider the market for yachts. The market price of each yacht is $350,000, and each buyer demands no more than one yacht.Suppose that Nick is the only consumer in the yacht market. His willingness to pay for a yacht is $560,000. Based on Nick's willingness to pay, thefollowing graph shows his demand curve for yachts.Shade the area representing Nick's consumer surplus using the green rectangle (triangle symbols).Nick's Demand560490Nick's Consumer Surplus420Market Price350280210140704QUANTITY (Yachts)PRICE (Thousands of dollars) Now, suppose another buyer, Rosa, enters the market for yachts, and her willingness to pay is $490,000.Based on Rosa's and Nick's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol).Next, shade Nick's consumer surplus using the green rectangle (triangle symbols), and shade Rosa's consumer surplus using the purple rectangle(diamond symbols).Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically.560490Demand Curve420Market Price350Nick's Consumer Surplus280210Rosa's Consumer Surplus1407034.QUANTITY (Yachts)PRICE (Thousands of dollars)

Given:Market price=$350,000Willingness to pay=$560,000Quantity=1Now,Consumer surplus=12(Willingness…

Answered: True or false: keeping his maximum…

True or false: keeping his maximum willingness to pay for a yacht in mind, Tim will buy the yacht because it will be worth more to him than its market price of $350,000

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

A gambling game requires people to place bets on either "Big" or "Small" or "Seven" designating the result of two dice throws. Big represents a sum of 8 to 12, while small is from 2 to 6. The special space "seven" is reserved for, of course, 7. Betting on "Big" provides a 1:1 betting win ratio amount. (Ex: Any bet amount of X, will net the winner another amount X, and still get his bet amount X back. ) Betting on "Small" also provides a 1:1 betting win ratio. The space "Seven" gives a 1:5 win ratio amount: Betting 100 money units on "Seven" and having a result of 7 nets the bettor 500 money units, and still have his 100 money units returned to him. If your bet does not appear, then the player loses his/her bet. What is the net Expected value of the strategy of betting 100 money units on "Big" ? Give your answer to two decimal places.
Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend s company and is willing to pay $30 just to spend an evening with her.
With tip giving in a restaurant in mind, how might reducing your economic payoff still be rational.
Maggie is currently using the website Matchmaker.com to help her search for a new partner. Maggie is enjoying going on the dates she has arranged through this website. She believes the marginal benefits are more than the marginal costs from using the website. Which of the following statements is true? Maggie should always continue using Matchmaker.com as the benefits outweigh the cost. Maggie's opportunity cost from using Matchmaker.com will eventually start to rise and her benefits will eventually start to fall. Maggie should immediately cease using Matchmaker.com when she has a successful date. With her benefits per hour currently exceeding her costs per hour, Maggie is at the optimal level of information. Maggie's use of Matchmaker.com will become subject to diminishing returns to scale as her costs fall. 0000
You want to travel to Las Vegas to celebrate spring break and your "A" in your microeconomics class! You are trying to figure out if you should drive or fly. A round trip airline ticket from Riverside to Las Vegas costs $350 and flying there and back takes about 5 hours. Driving roundtrip to Las Vegas costs about $50 in gas and takes about 10 hours. Other things constant, what is the minimum amount of money that you would have to expect to make by gambling in Las Vegas to induce you as a rational individual to fly rather than drive? O $10 an hour $60 an hour O $70 an hour O $300 an hour
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 to some stores than others. For 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: Store Travel Time Each Way Price of a Skirt (Minutes) (Dollars per skirt) Local Department Store 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.
Case No. 1 Emma likes to call her friend regularly during the month, but he lives abroad. A call costs him $5/minute. The psychological benefit (measured in dollars) of the first 100 minutes of call is $10/minute, that of the next 100 minutes, $5/minute, that of the next 100 minutes, $2.5/minute and finally, that of the next 100 minutes, also $2.5/minute. A) If Emma calls her friend 100 minutes a month, does she make a net gain? B) What is the number of call minutes per month that maximizes Emma's satisfaction? C) If we use Emma's monetary measure of satisfaction, what is the amount of her satisfaction? D) What should be the price per minute of a call for Emma to be at the maximum satisfaction by choosing to call 400 minutes per month?