Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

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Answer 1

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Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

(b)

To determine

Explain the conclusion drawn about the markets.

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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.

Answer 2

Question

Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

(b)

To determine

Explain the conclusion drawn about the markets.

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Answer 3

Question

Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

(b)

To determine

Explain the conclusion drawn about the markets.

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Answer 4

Question

Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

(b)

To determine

Explain the conclusion drawn about the markets.

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Answer 5

Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

(b)

To determine

Explain the conclusion drawn about the markets.

Answer 6

Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

Answer 7

Chapter 4, Problem 5QAP

(a)

To determine

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

Answer 8

(b)

To determine

Explain the conclusion drawn about the markets.

Answer 9

(b)

To determine

Explain the conclusion drawn about the markets.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 4.1 - Prob. 1Q Ch. 4.1 - Prob. 2Q Ch. 4.1 - Prob. 3Q Ch. 4.1 - Prob. 4Q Ch. 4.1 - Prob. 5Q Ch. 4.1 - Prob. 6Q Ch. 4.1 - Prob. 7Q Ch. 4.1 - Prob. 8Q Ch. 4.1 - Prob. 9Q Ch. 4.1 - Prob. 10Q

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

Describe whether consumers make purchasing decisions based on the general rules of thumb instead of price.

Explain the conclusion drawn about the markets.

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Chapter 4 Solutions