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The toll-bridge operator is considering an increase in the toll to $7.At this higher price, how many people would cross the bridge? Would the toll-bridge revenue increase or decrease?
You run a small business and would like to predict what will happen to the quantity demanded for your product if you raise your price. While you do not know the exact demand curve for your product
Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand is -1.0. Suppose also that Felicia spends $10,000 a year on food, the price of food is $2, and that her incom
By observing an individual"s behavior in the situations outlined below, determine the relevant income elasticities of demand for each good (i.e., whether it is normal or inferior). If you cannot deter
Can you tell from the available information which product will generate the most revenue? If yes, why? If not, what additional information do you need?
Judy has decided to allocate exactly $500 to college textbooks every year, even though she knows that the prices are likely to increase by 5 to 10 percent per year and that she will be getting a subst
The director of a theater company in a small college town is considering changing the way he prices tickets. He has hired an economic consulting firm to estimate the demand for tickets.
Orange juice and apple juice are known to be perfect substitutes. Draw the appropriate price-consumption curve (for a variable price of orange juice) and income-consumption curve.
The demand for a specific brand of toothpaste and the demand for toothpaste in general b. The demand for gasoline in the short run and the demand for gasoline in the long run
Suppose that the average household in a state consumes 800 gallons of gasoline per year. A 20-cent gasoline tax is introduced, coupled with a $160 annual tax rebate per household.
Which of the following events would cause a movement along the demand curve for U.S. produced clothing, and which would cause a shift in the demand curve?
Travel by bus and travel by subway If the price of one of the goods increases, explain the effect on the quantity demanded of each of the goods. In each pair
Tickets to a rock concert sell for $10. But at that price, the demand is substantially greater than the available number of tickets. Is the value or marginal benefit of an additional ticket greater th
Suppose that an individual allocates his or her entire budget between two goods, food and clothing. Can both goods be inferior? Explain.
Suppose that Jones and Smith have each decided to allocate $1000 per year to an entertainment budget in the form of hockey games or rock concerts
Anne has a job that requires her to travel three out of every four weeks. She has an annual travel budget and can travel either by train or by plane. The airline on which she typically flies has a fre
Debra usually buys a soft drink when she goes to a movie theater, where she has a choice of three sizes: the 8-ounce drink costs $1.50,the 12-ounce drink $2.00, and the 16-ounce drink $2.25.Describe t
Consumers in Georgia pay twice as much for avocados as they do for peaches. However, avocados and peaches are the same price in California
Suppose Brenda"s preferences are such that she always receives three times as much satisfaction from an extra unit of styling as she does from gas mileage. What type of car will Brenda choose?
Suppose also that her utility function is given by the equation u(M, P) = 2M + P. What combination of meat and potatoes should she buy to maximize her utility? (Hint: Meat and potatoes are perfect sub
Jane receives utility from days spent traveling on vacation domestically (D) and days spent traveling on vacation in a foreign country (F), as given by the utility function U(D,F) = 10DF. In addition,
Julio receives utility from consuming food (F) and clothing (C) as given by the utility function u(F,C) = FC In addition, the price of food is $2 per unit, the price of clothing is $10 per unit, and J
The utility that Meredith receives by consuming food F and clothing C is given by u(F,C) = FC Suppose that Meredith"s income in 1990 is $1200and that the prices of food and clothing are $1 per unit fo
A price consumption curve and a demand curve an individual demand curve and a market demand curve
With food on the horizontal axis and clothing on the vertical axis, identify on a graph the set of points that give Bridget the same level of utility as the bundle (10,5). Do the same for Erin on a se