ECONOMICS W/CONNECT+20 >C<
20th Edition
ISBN: 9781259714993
Author: McConnell
Publisher: MCG CUSTOM
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Chapter 11, Problem 2P
To determine
Average Total Cost .
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Consider the market for sweaters in a Hamilton
neighbourhood shown in the figure to the right. The
consumer surplus generated by consuming the 29th
sweater is
OA. $67.90.
OB. $58.20.
○ C. $77.60.
OD. $38.80.
○ E. $19.50.
Price ($)
97
68.0
48.5
29.0
29.0
Sweater Market
48.5
Quantity (Sweaters per week)
Not use ai please
In the following table, complete the third column by determining the quantity sold in each country at a price of $18 per toy train. Next, complete the
fourth column by calculating the total profit and the profit from each country under a single price.
Price
Single Price
Quantity Sold
Price Discrimination
Country
(Dollars per toy
train)
(Millions of toy
trains)
Profit
(Millions of
dollars)
Price
(Dollars per toy
train)
Quantity Sold
(Millions of toy
trains)
Profit
(Millions of
dollars)
France
18
Russia
18
Total
N/A
N/A
N/A
N/A
Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of
production remains $8 per toy.
Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each
country, and total profit if Le Jouet price discriminates.
Le Jouet charges a lower price in the market with a relatively
elastic…
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- Using data from 1988 for houses sold in Andover, Massachusetts, from Kiel and McClain (1995), the following equation relates housing price (price) to the distance from a recently built garbage incinerator (dist): = log(price) 9.40 + 0.312 log(dist) n = 135, R2 = 0.162. Interpretation of the slope coefficient? ► How would our interpretation of the slope coefficient change if distance were measured in metres instead of kilometres?arrow_forwardIf GDP goes up by 1% and the investment component of GDPgoes up by more than 1%, how is the investment share ofGDP changing in absolute terms?▶ In economics, what else is expressed as relative percentagechanges?arrow_forwardCEO Salary and Firm SalesWe can estimate a constant elasticity model relating CEO salary to firm sales. The data set is the same one used in Example 2.3, except we now relate salary to sales. Let sales be annual firm sales, measured in millions of dollars. A constant elasticity model is[2.45]ßßlog (salary) = ß0 + ß0log (sales) + u,where ß1 is the elasticity of salary with respect to sales. This model falls under the simple regression model by defining the dependent variable to be y = log(salary) and the independent variable to be x = log1sales2. Estimating this equation by OLS gives[2.46]log (salary)^=4.822 + 0.257 (sales) n = 209, R2 = 0.211.The coefficient of log(sales) is the estimated elasticity of salary with respect to sales. It implies that a 1% increase in firm sales increases CEO salary by about 0.257%—the usual interpretation of an elasticity.arrow_forward
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