Economics (Book Only)
12th Edition
ISBN: 9781285738321
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 32, Problem 1VQP
To determine
Describe the simple majority decision rule with a numerical example.
Expert Solution & Answer
Explanation of Solution
Suppose the government decides to make a cost benefit analysis in the economy, it takes 6 persons including supporters and the people who oppose the project. Also calculate the cost and benefit from them as shown in the table below:
Table 1
| Voters | Benefits | Taxes | Votes |
| A | 50 | 30 | Yes |
| B | 40 | 30 | Yes |
| C | 35 | 30 | Yes |
| D | 31 | 30 | Yes |
| E | 2 | 30 | No |
| f | 1 | 30 | No |
According to the table, the analysis is taken between 6 persons. The total cost of the project is given as $180 and the total benefit from it is given as $159. Here, the total cost from the product is greater than the total benefit. As per the rule, the government will not take the project on reality. However, in this case, the majority of them in the side of supporters of the project than the antagonist. Then here the majority decision rule can take place, the project is passed, even though its cost is high.
Economics Concept Introduction
Cost benefit analysis: Cost benefit analysis is a process to analyze the cost of the project and the benefit from it. Also, this process helps to decide the project being undertaken or rejected.
Simple majority decision rule: The majority rule is a decision rule, if majority support the project than the opposed, the project will be passed, and even its cost is greater than the benefit from it.
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Students have asked these similar questions
At the 8:10 café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (that is she cannot price discriminate).
Students with early classes
Students without early classes
Coffee
70
60
Banana
50
100
The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? HINT: if you sell the bundle, can you make more by offering coffee separately?
If so, what price should be charged for the bundle? (Show calculations)
Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.
Use the following demand data:
Group
Value
Frequency
Baby boomers
$5
20%
Generation X
$4
10%
Generation Y
$3
10%
`Tweeners
$2
10%
Seniors
$2
10%
Others
$0
40%
Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.
Group
Value
Frequency
Baby boomers
$5
20%
Generation X
$4
10%
Generation Y
$3
10%
`Tweeners
$2
10%
Seniors
$2
10%
Others
$0
40%
ur marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.
Chapter 32 Solutions
Economics (Book Only)
Ch. 32.3 - Prob. 1STCh. 32.3 - Prob. 2STCh. 32.3 - Prob. 3STCh. 32.4 - Prob. 1STCh. 32.4 - Prob. 2STCh. 32.6 - Prob. 1STCh. 32.6 - Prob. 2STCh. 32.6 - Prob. 3STCh. 32.6 - Prob. 4STCh. 32 - Prob. 1VQP
Ch. 32 - Prob. 2VQPCh. 32 - Prob. 3VQPCh. 32 - Prob. 4VQPCh. 32 - Prob. 5VQPCh. 32 - Prob. 1QPCh. 32 - Prob. 2QPCh. 32 - Prob. 3QPCh. 32 - Prob. 4QPCh. 32 - Prob. 5QPCh. 32 - Prob. 6QPCh. 32 - Prob. 7QPCh. 32 - Prob. 8QPCh. 32 - Prob. 9QPCh. 32 - Prob. 10QPCh. 32 - Prob. 11QPCh. 32 - Prob. 12QPCh. 32 - Prob. 1WNGCh. 32 - Prob. 2WNGCh. 32 - Prob. 3WNG
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