Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 13.A, Problem 3SPPA
To determine
To compute:
The quantities of nuts and popcorn to be bought by Ms. M and the two points on S's demand curve for nuts.
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Douglas allocates his budget of $24 per week to 3 goods, cereal, books and clothing. Use the table below to answer the following question
Quantity
Total Utility of Cereal
Total Utility of Books
Total Utility of Clothing
1
50
75
25
2
90
135
45
3
120
175
60
4
140
205
70
5
155
225
78
1. If the price of cereal is $2, the price of books is $3 and the price of clothing is $1, at what point does Douglas maximize his utility? Explain.
Suppose that with a budget of $210, Fatima spends $126 on sushi and $84 on bagels when sushi costs $2 per piece and bagels cost
$2 per bagel. Then, after the price of bagels falls to $1 per bagel.
Instructions: Enter your answers as a whole number.
How many pieces of sushi and how many bagels did Fatima consume before the price change?
pieces of sushi and
bagels
At the new prices, how much money would it have cost Fatima to buy those same quantities (that is, the quantities that she consumed
before the price change)?
Given that it used to take Fatima's entire $210 to buy those quantities, how big is the income effect caused by the lower price of
bagels?
Consumer choiceJo buys muffins and cupcakes at a bakery. Jo’s weekly budget for baked goods is $70. The priceof muffins is $1.25. The price of cupcakes is $1.75.a) Write down Jo’s budget constraint: express the quantity of cupcakes as a function of thequantity of muffins.b) Show Jo’s budget constraint on a graph. Let quantity of muffins be on the horizontal axis. Letquantity of cupcakes be on the vertical axis.c) Show the following consumption bundles (points) on the graph. Calculate the cost of eachconsumption bundle and state which one of them are feasible.• Point A: 49 muffins and 3 cupcakes.• Point B: 38 muffins and 15 cupcakes.• Point C: 24 muffins and 24 cupcakes.• Point D: 14 muffins and 30 cupcakes.d) Which of these four points can be Jo’s optimal consumption bundle? Why?e) The price of cupcakes decreased to $1.5. Provide an example of a consumption bundle thatbecame feasible now but wasn’t feasible before the decrease in price. Calculate the cost ofthis consumption bundle…
Chapter 13 Solutions
Foundations of Economics (8th Edition)
Ch. 13.A - Prob. 1SPPACh. 13.A - Prob. 2SPPACh. 13.A - Prob. 3SPPACh. 13.A - Prob. 4SPPACh. 13.A - Prob. 5SPPACh. 13.A - Prob. 1IAPACh. 13.A - Prob. 2IAPACh. 13.A - Prob. 3IAPACh. 13.A - Prob. 4IAPACh. 13 - Prob. 1SPPA
Ch. 13 - Prob. 2SPPACh. 13 - Prob. 3SPPACh. 13 - Prob. 4SPPACh. 13 - Prob. 5SPPACh. 13 - Prob. 6SPPACh. 13 - Prob. 7SPPACh. 13 - Prob. 8SPPACh. 13 - Prob. 9SPPACh. 13 - Prob. 10SPPACh. 13 - Prob. 1IAPACh. 13 - Prob. 2IAPACh. 13 - Prob. 3IAPACh. 13 - Prob. 4IAPACh. 13 - Prob. 5IAPACh. 13 - Prob. 6IAPACh. 13 - Prob. 7IAPACh. 13 - Prob. 8IAPACh. 13 - Prob. 9IAPACh. 13 - Prob. 10IAPACh. 13 - Prob. 1MCQCh. 13 - Prob. 2MCQCh. 13 - Prob. 3MCQCh. 13 - Prob. 4MCQCh. 13 - Prob. 5MCQCh. 13 - Prob. 6MCQCh. 13 - Prob. 7MCQ
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