Classify the good as excludable, non-excludable, rival, and non-rival.

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Answer 1

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

Answer 6

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.

Economics Concept Introduction

Non-excludable good: A good is non-excludable ifpeople who do notpay cannot be easily prevented from using the good.

Non-rival good: A good is non-rival if one person’suse of the good does not reduce the ability of other person to use the same good.

Answer 7

Chapter 16, Problem 1SPA

To determine

Classify the good as excludable, non-excludable, rival, and non-rival.

Answer 8

Expert Solution & Answer

Explanation of Solution

A Big Mac: It is a good whose consumption by one reduces its availability to others (rival) and from which a personcan be excluded as it can only be consumed by person, if only he or she pays for it. Thus, it is rival and excludable.
Brooklyn Bridge: It is a good whose use by one reduces its availability to others especially when it is crowded (rival) and from which none is excluded as it can only be utilized by all irrespective ofthey paying or not (there is no toll for using the bridge). Thus, it is rival and non-excludable.
A view of the statue of Liberty: It is a good that is non-rival and non-excludable because viewing of the statue by a person does not reduce other people’s view and none is prevented from viewing it.
A hurricane warning system: It is a good that is non-rival and non-excludable because the warning learned by a person does not limit other people’s use of warning, and the warning is sound enough for everyone to understand.