ESSENTIALS OF ECONOMICS
4th Edition
ISBN: 9781464188466
Author: KRUGMAN
Publisher: Norton, W. W. & Company, Inc.
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Question
Chapter 1, Problem 14P
To determine
Determine:
Effects on the Mexican economy of reduced spending in US home purchases.
Concept Introduction
One person’s spending becomes another person’s income: In a market, people make their living by selling things to one another. Large spending of one group results in a high income of the other and vice-versa. This is because one person's spending becomes another person’s income. If a person is willing to pay, then only it will become earning for the other. These repercussions play an important role in recession and in its recoveries.
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A movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)?
a. $2,000; $2,600
b. $1,500; $2,100
c. $1,500; $2,000
A movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)?
a. $2,000; $2,600
b. $1,500; $2,100
c. $1,500; $2,000
What profi is most important in business ?
Chapter 1 Solutions
ESSENTIALS OF ECONOMICS
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