Identify the role of market price in the allocation of resources.

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Answer 1

Question

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

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Answer 4

Question

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

Answer 6

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

Answer 7

Chapter 5, Problem 1SPA

To determine

Identify the role of market price in the allocation of resources.

Answer 8

Expert Solution & Answer

Explanation of Solution

There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first comeâ€“first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first comeâ€“first serve system.

In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first comeâ€“first serve system, and the reservation based on first come - first serve system.

In the case of first restaurant, reservations are essential. So, the method of first comesâ€“first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.

In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.

Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.

Answer 12

Ch. 5.1 - Prob. 1RQ Ch. 5.1 - Prob. 2RQ Ch. 5.1 - Prob. 3RQ Ch. 5.1 - Prob. 4RQ Ch. 5.2 - Prob. 1RQ Ch. 5.2 - Prob. 2RQ Ch. 5.2 - Prob. 3RQ Ch. 5.2 - Prob. 4RQ Ch. 5.2 - Prob. 5RQ Ch. 5.2 - Prob. 6RQ

Identify the role of market price in the allocation of resources.

Identify the role of market price in the allocation of resources.

Explanation of Solution

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