Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 3, Problem 7E
(a)
To determine
Graph the budget line.
(b)
To determine
Identify three different bundles of CD and DVD with different budget constraints.
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Suppose you have a budget of 30 to spend on two goods: pizzas and burgers. Each pizza is $5 while each burger is $10. Suppose you already purchased 6 pizzas. What is the maximum number of burgers that you can buy with the remaining funds in your budget?
1.
2.
Suppose Frank enjoys traveling and his utility is a function of the number of
airplane trips he takes and the number of bus rides he takes. His utility function
is given by U(b,p) = 3b0-4p0.8. A trip on a plane costs $400, a trip on the bus costs
$50 and Frank has $3,000 to spend on travel.
a. Draw Frank's budget line on a graph with bus trips on the vertical axis.
b. Calculate AND INTERPRET the slope of Frank's budget line.
c. Draw a representative indifference curve on your graph and provide a
function that describes the slope of this indifference curve (i.e., find Frank's
marginal rate of substitution). What is the INTERPRETATION of the marginal
rate of substitution?
d. What two conditions must be met in order for Frank to maximize his utility?
e. What are the utility maximizing quantities of plane trips and bus trips for
Frank?
Given income of $1000, Px = 25 and Py = 40, find (1) a function for the MRS and
(2) the utility maximizing consumption bundle for each of the…
Marie has a weekly budget of $2400, which she likes to spend on magazines and pies. If the price of one magazine is $40, what is the maximum number of magazines she can buy in a week? If the price of a pie is $120, what is the maximum number of pies she can buy in a week? Compute and show Marie’s budget schedule for pies and magazines. Draw Marie’s budget line with pies on the horizontal axis and magazines on the vertical axis.
Chapter 3 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Prob. 17E
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