Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 36, Problem 4.1P
To determine
Draw the consumption function then calculate the error term and the sum total.
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Common Property and Public Goods Problem
To water their vine yards, a group of farmers in Cyprus drill identical wells and draw irrigation water from an underground aquifer. This aquifer has a natural maximum recharge rate of 340,000 liters per day (in others words, a maximum of 340,000 liters of water per day filter into this underground reservoir from natural sources). The table below shows the relationship between the daily total water output (total product) and the number of wells operating.
Number of Wells Operating
Total Water Output (in 1000s of Liters/Day)
Total Revenue (TR)
Total Cost (TC)
Average Revenue (A VR)
Profit
0
0
0
0
0
0
10
100
20
200
30
280
40
340
50
380
60
400
70
400
80
380
90
340
(a) The cost of operating a well is €60/day and the value of water to each farmer is €0.1/liter. Using this information and the…
Compute the percentage changes for the following
(enter your responses as integers):
Initial Value
100
50
10
New Value Percentage Change
112
54.0
12.5
The table to the right contains price-demand and total cost data for the production of projectors, where p is the
wholesale price (in dollars) of a projector for an annual demand of x projectors and C is the total cost (in dollars)
of producing x projectors. Answer the following questions (A) - (D).
(A) Find a quadratic regression equation for the price-demand data, using x as the independent variable.
X
270
360
520
780
The fixed costs are $.
(Round to the nearest dollar as needed.)
ITTI
y =
(Type an expression using x as the variable. Use integers or decimals for any numbers in the expression. Round to two decimal places as needed.)
Use the linear regression equation found in the previous step to estimate the fixed costs and variable costs per projector.
The variable costs are $ per projector.
(Round to the nearest dollar as needed.)
(C) Find the break even points.
The break even points are
(Type ordered pairs. Use a comma to separate answers as needed. Round to the nearest integer as…
Chapter 36 Solutions
Principles of Economics (12th Edition)
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