EBK MICROECONOMICS
12th Edition
ISBN: 9780100659452
Author: PARKIN
Publisher: YUZU
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Chapter 8, Problem 3SPA
To determine
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5
Ramona is an asparagus farmer and the world asparagus market is perfectly competitive.
The market price is $23 a bundle. Ramona sells 800 bundles a week and her marginal cost is $25 a bundle.
The market price falls to $20 a bundle, and Ramona cuts her output to 500 bundles a week.
Ramona's average variable cost and marginal cost fall to S20 a bundle.
Ramona is
A. not maximizing profit because she has cut her asparagus production
O B. not maximizing profit because she is incurring an economic loss
C. maximizing profit and she is incurring an economic loss
O D. maximizing profit and she is making an economic profit
E. not maximizing profit because marginal revenue does not equal marginal cost
Max enjoys windsurfing and snorkeling. Max has $35 a day to spend, and he can spend as much time as he likes on his leisure pursuits. The price of renting equipment for windsurfing is $10 an hour and for snorkeling is $5 an hour. The table shows the total utility Max gets from each activity.
Total Total
Hours utility from utility from
per day windsurfing snorkeling
1 120 40
2 220 76
3 300 106
4 360 128
5 396 140
6 412 150
7 422 158
Calculate Max’s marginal utility from windsurfing at each number of hours per day. Does Max’s marginal utility from windsurfing obey the principle of diminishing marginal utility?
How many hours does…
Chapter 8 Solutions
EBK MICROECONOMICS
Ch. 8.1 - Prob. 1RQCh. 8.1 - Prob. 2RQCh. 8.1 - Prob. 3RQCh. 8.1 - Prob. 4RQCh. 8.2 - Prob. 1RQCh. 8.2 - Prob. 2RQCh. 8.2 - Prob. 3RQCh. 8.2 - Prob. 4RQCh. 8.3 - Prob. 1RQCh. 8.3 - Prob. 2RQ
Ch. 8.3 - Prob. 3RQCh. 8.3 - Prob. 4RQCh. 8.3 - Prob. 5RQCh. 8.4 - Prob. 1RQCh. 8.4 - Prob. 2RQCh. 8.4 - Prob. 3RQCh. 8.4 - Prob. 4RQCh. 8 - Prob. 1SPACh. 8 - Prob. 2SPACh. 8 - Prob. 3SPACh. 8 - Prob. 4SPACh. 8 - Prob. 5SPACh. 8 - Prob. 6SPACh. 8 - Prob. 7SPACh. 8 - Prob. 8SPACh. 8 - Prob. 9SPACh. 8 - Prob. 10SPACh. 8 - Prob. 11SPACh. 8 - Prob. 12SPACh. 8 - Prob. 13SPACh. 8 - Prob. 14SPACh. 8 - Prob. 15SPACh. 8 - Prob. 16APACh. 8 - Prob. 17APACh. 8 - Prob. 18APACh. 8 - Prob. 19APACh. 8 - Prob. 20APACh. 8 - Prob. 21APACh. 8 - Prob. 22APACh. 8 - Prob. 23APACh. 8 - Prob. 24APACh. 8 - Prob. 25APACh. 8 - Prob. 26APACh. 8 - Prob. 27APACh. 8 - Prob. 28APACh. 8 - Prob. 29APACh. 8 - Prob. 30APACh. 8 - Prob. 31APACh. 8 - Prob. 32APA
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Similar questions
- 5. Max has $35 a day to spend on windsurfing and snorkeling and he can spend as much time as he likes doing them. The price of renting equipment for windsurfing is $10 an hour and for snorkeling is $5 an hour. The table shows the total utility Max gets from each activity. a Calculate Max's marginal utility from windsurfing at each number of hours per day. Does Max's marginal utility from windsurfing obey the principle of Hours per day 1 2 3 4 C. 5 6 Total utility from windsurfing 120 220 300 360 396 412 422 Total utility from snorkeling 40 76 106 128 140 150 158 diminishing marginal utility? b. Calculate Max's marginal utility from snorkeling at each number of hours per day. Does Max's marginal utility from snorkeling obey the principle of diminishing marginal utility? Which does Max enjoy more: his 6th hour of windsurfing or his 6th hour of snorkeling?arrow_forwardThe table details the total utility that J.J. gets from going to see basketball and hockey games during a month. J.J. had $120 to spend. Calculate the marginal utility and the marginal utility per dollar spent for both basketball and hockey given that the price is $20 and $30 respectively. Based on your calculations: how many basketball games would he attend? how many hockey games would he attend?arrow_forwardQuestion 2arrow_forward
- The table shows Jerry's total utility from lottery tickets and candy bars. The price of a lottery ticket is $2, the price of a candy bar is $4, and Jerry has $12 a week to spend. Calculate Jerry's marginal utility from the fourth lottery ticket and marginal utility per dollar when he buys 4 lottery tickets. Calculate Jerry's marginal utility from the second candy bar and marginal utility per dollar when he buys 2 candy bars >>> Answer to 1 decimal place. ………… Jerry's marginal utility from the fourth lottery ticket is units. The marginal utility per dollar from lottery tickets when Jerry buys 4 lottery tickets is units per dollar. Jerry's marginal utility from the second candy bar is units. The marginal utility per dollar from candy bars when Jerry buys 2 candy bars is units per dollar. C Lottery tickets Total utility 0 14 24 32 38 Quantity per week 0 1 2 3 4 Quantity per week ܘ ܝ ܚ ܚ ܂ 2 3 Candy bars 4 Total utility 0 100 120 134 144arrow_forwardQuestion 9arrow_forwardAri intends to purchase a new car and has narrowed it down to a Dodge Ram truck or a Toyota Camry. A Dodge Ram truck costs $55000 while a Toyota Camry costs $20000. The utility that Ari will get from Dodge Ram truck is 12500 while Toyota Camry will generate a utility of 2500. Note: A purchase generating utility tells us the marginal utility of the good. What is the Marginal Utility per Dollar for Dodge Ram truck? What is the Marginal Utility per Dollar for Toyota Camry? Will Ari be better off buying a Dodge Ram truck or a Toyota Camry? ODodge Ram truck OToyota Camry Aarrow_forward
- I got the tables but I need the 2 answers to the question "to maximize her total utility, the number of hours that Cindy spends golfing is..."arrow_forwardKenji enjoys buying shoes. The following table contains information on Kenji's utility from shoes each month. Fill in the two missing cells of the table. Total Utility (Utils) 0 35 Shoes (Pairs) ON 36 90 110 125 135 Marginal Utility (Utils per pair) 35 30 25 15 10arrow_forwardQuestion 2: Kamila has $30 to spend on Pita Wraps and Bubble Tea. The price of a Pita Wrap is $6 and the price of a glass of Bubble Tea is $3. The table below shows his total utility from different quantities of the two items. Quantity of Pita Wraps Quantity of Total utility Bubble Tea Total utility 1 60 1 40 102 2 70 3 132 91 4 144 4 106 5 144 112 6. 138 115 7 128 7 115 a) What is Kamila's optimal consumption bundle? Show your logic. 1 b) If Kamila can drink all the Bubble Tea she wants for free, how many glasses will she consume? Briefly explain.arrow_forward
- Questions and table attached, thank youarrow_forwardThe following table shows Ellie's utility from consuming slices of pie and cans of 7 - Up. Slices of Pie 0 1 23456 Marginal Utility Cans from Last Slice of 7-Up 0 1 2 120 100 80 60 40 20 234 5 6 Marginal Utility from Last Can 120 60 45 30 20 15 Suppose Ellie has $6 per week to spend on pie and 7 - Up and that the price of a slice of pie is $1.00. 1.) Use the point drawing tool to plot Ellie's demand for 7-Up at a price of $2.00. Label this point 'A'. 2.) Use the point drawing tool to plot Ellie's demand for 7- Up at a price of $0.50. Label this point 'B'. 3.) Use the line drawing tool to connect the dots to form Ellie's demand curve. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Price of 7-Up 12 4.5- 4- 3.5- 3- 2.5- 2- 1.5- 1- 0.5- 0- 3 4 Quantity of 7-Up 5arrow_forwardCalculate the marginal utility .. # of cookies per day Total Utility per Day 0 0 1 100 2 200 3 275 4 325 5 350 6 360 7 360arrow_forward
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