Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12, Problem 2.8P
(a)
To determine
Identify Pareto efficient change.
(b)
To determine
Identify Pareto efficient change.
(c)
To determine
Identify Pareto efficient change.
(d)
To determine
Identify Pareto efficient change.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
12. Which of the following are actual Pareto-efficient changes?
Explain briefly.
a. You buy three oranges for $1 from a street vendor.
b. You are near death from thirst in the desert and must pay a
passing vagabond $10,000 for a glass of water.
c. A mugger steals your wallet.
d. You take a taxi ride in downtown Manhattan during rush hour.
If you buy something, you are never ripped off, at least according to the way economists think. If you are willing to spend the money for something, then it has at least that much utility to you. Think about the following three situations:
In this very moment
A baseball game in a ballpark that does not allow outside food and drink
The end a three-mile hike in the desert when you forgot water
In each situation, how much would you be willing to pay for the first bottle of water? Would you buy a second bottle of water? If so, how much would you pay? Discuss how utility changes in different circumstances and with each additional unit you buy.
Katie loves swimming. Every afternoon, she visits the local swimming pool for a swim. The entry cost to the pool
costs Katie $10 but she can swim for as long as she wants. Once she has entered the pool and paid the fee, Katie
wonders how many hours should she spend swimming if she were to think like an economist. She expects to gain
an incremental benefit of $21 from the first hour of swimming, then gains subsequent incremental benefits of $17
from the second, $11 from the third and $4 from the fourth. For every hour spent swimming, it will cost Katie $6 as
she could have spent the time doing her homework.
In determining how many hours Katie should be swimming, the $10 entry fee to the pool is a/an
Type A for Average cost, M for Marginal cost, S for Sunk cost or O for Opportunity
cost.
Using marginal analysis, what is the optimal amount of hours Katie should spend swimming?
The maximum surplus for Katie, from spending the number of hours you found in part b, is $
Answer to the nearest…
Chapter 12 Solutions
Principles of Economics (12th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- 8. Which of the following are examples of Pareto- efficient changes? Explain your answers! a. Ryan has to pay his $250 debts next week but he is lacking money and only got $50 in his pocket. He decided to try his luck in The White Zephyr Casino. b. Aiken's sister is helping him do his online econ exam in return for her favourite dish. Grand Spire Bank Corp decided to give scholarships to outstanding students with a condition that once they graduate, they must work for Grand Spire Bank Corp for 2 years. d. People who lived in a slum area in Jakarta didn't С. Vade Mecum Academy's get any compensation from Dreamscape Co. for displacing their home with a high class housing area. e. Burger Alley Restaurant packages for its customers. offers bundlesarrow_forwardSuppose I am sitting in a football stadium watching my team win a game by a lot of points late in the 4th quarter (the game is almost over and the outcome is not in doubt). My friend suggests we leave the game early to get ahead of game traffic. I reply “I want to stay until the end because I paid $100 for this ticket." Use our principles of economics to analyze my decision in this example.arrow_forwardIn the economy, is there only one efficient combination of goods?arrow_forward
- Suppose you are writing an argumentative essay about curfews and want to include the following ideas:Two years ago, the Hayville City council implemented a 10:00 p.m. curfew for residents under sixteen.The Hayville City police department saw no significant decrease in the rate of juvenile-related crime after the curfew was implemented.Which transition should you add between these sentences in order to communicate the relationship between the ideas effectively? Two years ago, the Hayville City council implemented a 10:00 p.m. curfew for residents under sixteen; as a matter of fact, the Hayville City police department saw no significant decrease in the rate of juvenile-related crime after the curfew was implemented. Two years ago, the Hayville City council implemented a 10:00 p.m. curfew for residents under sixteen; however, the Hayville City police department saw no significant decrease in the rate of juvenile-related crime after the…arrow_forwardAn apartment complex included a fixed price of water in the monthly rent. One day, the city decided to attach a water meter to each individual apartment and charge the tenant for actual water usage. As a result, water usage in the apartment complex went way down. Explain this situation using a principle of economics.arrow_forwardWhat is the problem that economists see with our resources and our wants? Please just answer with one or two sentences.arrow_forward
- Peter, John, and James are discussing how to share three chocolate bars and three bags of chips. For each of the following statements, state whether the statement is TRUE or FALSE and provide a short explanation for your choice. a) It is always Paretig efficient for Peter, John, and James to have one chocolate bar and one bag of chips each.arrow_forwardThe scenarios each illustrate the principle of economics. Match each scenarios with the principle that best fits it You are currently in a labeling module. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop. On Black Friday, there are huge sales for electronics at many retail stores. David must decide between buying a camera at one store and buying a flat-screen TV at another store and buying one means he will lose the ability to purchase the other.An educational software company wants to expand the number of economics questions that it offers and is considering hiring another economist. It compares how much adding another worker will improve the product with the additional cost.To entice students to keep themselves up to date with economic current events, an instructor offers extra credit to students for participating in an online discussion forum, and this sparks a lively debate about environmental policy.…arrow_forwardWhat is the term for the economic principle that individuals try to get the greatest benefit from a given resource? A) Opportunity Cost B) Marginal Utility C) Supply and Demand D) Rational Choice Theoryarrow_forward
- . Your best friend has just purchased a new Sport Utility Vehicle (SUV). “These things are great.” he says. “They can get you to the private unspoiled places no one else can reach. On the road, it’s nice because you sit so high and can see over the other cars.” Your friend thinks everyone should buy an SUV. Is there an error in his reasoning? If so, what is it? (Use economics terms).arrow_forwardJoab and his friends used to play a game where they put on a dog's electric fence collar and tried to stand over the electric fence line because, after careful consideration of the costs and benefits, they decided that the benefits of watching their friends get shocked outweighed the costs of being shocked themselves. According to the economic way of thinking, by playing this game, Joab and his friends were O not responding to the incentives they faced. making an irrational choice. making a rational choice. not fully considering the costs and benefits of their decision since this is obviously a mistake for anybody to do.arrow_forwardu work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, flopsicles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashies increases by 4%, the quantity of flopsicles sold increases by 1% and the quantity of mookies sold decreases by 5%. Your job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning