Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 4, Problem 2IP
(a)
To determine
Effect of low interest rate on house price.
(b)
To determine
The Effect of the increased mortgage rate on house price.
(c)
To determine
Effects of increasing demand for housing on house price in San Francisco.
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1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3
apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added
5 units to Sadid's utility, while the last bread added 7 units.
Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's
consumption bundle? Why or why not? Give reasons in support of your answer.
State the condition for a consumer's utility maximizing choice and illustrate graphically.
2. Consider the following table of long-run total costs for three different firms:
Quantity
Total Cost ($)
Firm A
Firm B
Firm C
1
60
11
21
2
70
24
34
3
80
39
49
4
90
56
66
5
100
75
85
6
110
96
106
7
120
119
129
Does each of these firms experience economies of scale or diseconomies of scale? Explain your answer
with necessary calculations.
Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer.State the condition for a consumer's utility maximizing choice and illustrate graphically.
1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3
apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added
5 units to Sadid's utility, while the last bread added 7 units.
Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's
consumption bundle? Why or why not? Give reasons in support of your answer.
State the condition for a consumer's utility maximizing choice and illustrate graphically.
Chapter 4 Solutions
Microeconomics
Ch. 4.1 - Prob. 1QCh. 4.1 - Prob. 2QCh. 4.1 - Prob. 3QCh. 4.1 - Prob. 4QCh. 4.1 - Prob. 5QCh. 4.1 - Prob. 6QCh. 4.1 - Prob. 7QCh. 4.1 - Prob. 8QCh. 4.1 - Prob. 9QCh. 4.1 - Prob. 10Q
Ch. 4 - Prob. 1QECh. 4 - Prob. 2QECh. 4 - Prob. 3QECh. 4 - Prob. 4QECh. 4 - Prob. 5QECh. 4 - Prob. 6QECh. 4 - Prob. 7QECh. 4 - Prob. 8QECh. 4 - Prob. 9QECh. 4 - Prob. 10QECh. 4 - Prob. 11QECh. 4 - Prob. 12QECh. 4 - Prob. 13QECh. 4 - Prob. 14QECh. 4 - Prob. 15QECh. 4 - Prob. 16QECh. 4 - Prob. 17QECh. 4 - Prob. 18QECh. 4 - Prob. 19QECh. 4 - Prob. 20QECh. 4 - Prob. 21QECh. 4 - Prob. 22QECh. 4 - Prob. 23QECh. 4 - Prob. 24QECh. 4 - Prob. 1QAPCh. 4 - Prob. 2QAPCh. 4 - Prob. 3QAPCh. 4 - Prob. 4QAPCh. 4 - Prob. 5QAPCh. 4 - Prob. 6QAPCh. 4 - Prob. 1IPCh. 4 - Prob. 2IPCh. 4 - Prob. 3IPCh. 4 - Prob. 4IPCh. 4 - Prob. 5IP
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Similar questions
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