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where P is dollar price, Q is quantity in units and I is income expressed in thousands of dollars. Let the price of cookies and apples remain constant at $10 per unit for both goods.
The marketing team of Burton Snowboard is analyzing her demand for two types of snowboard – Professional and Standard models. At Thanksgiving sales, the Professional board is discounted from the
Suppose the price of celeriac decreases from $80 to $60, and the quantity demanded increases from 100 to 150 bushels. What is the price elasticity of demand using the standard percentage formulas? Wha
Calculate the equilibrium price and quantity, consumer surplus, producer surplus and total surplus under autarky (that is, when Monona has a closed carp market).
Produce the profit maximizing level of output and therefore there will be no deadweight loss associated with this production.
In a perfectly competitive industry if each firm is identical then we can calculate the number of firms in the industry by
In a perfectly competitive industry, entry of firms will occur until
As output increases a firm finds that its marginal cost of producing an additional unit is rising. From this information we know that
Being a rational consumer, at August prices Tony purchased 25 nuts. How many berries did he consume in August? What was the marginal rate of substitution at the optimal consumption bundle
Local performers are gradually loosing in the competition with recognized international bands, and Serida’s income decreases to $50 while prices are the same as before. What is the equation of t
Suppose that the total short-run cost function of a firm is given by TC = 200 + 20Q, where TC is the total cost and Q is the total quantity of output.
Suppose that Starplex decides to implement third degree price dis-crimination. How many tickets w ll be purchased by college students? What price should Starplex charge college students? [Hint: carry
What is the equation for the Marginal Social Cost curve? Use this to figureout what the socially optimal amount of widgets is. Is the socially optimal thesame amount as you found in part (a)?
Assuming that the shop manager assigns Jeremy to waxing snowboards, how many boards can he wax during his work shift? What if he is assigned to waxing skis instead?
Potatoes cost Janice $0.50 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. Suppose she feels that the first pound of potatoes is worth $1.50, the second pound is
How many strategy profiles are there in this game?
On balance one would argue that our society is mixed on the question of allowing firms to operate with market power; we certainly don't permit unregulated monopolies from operating but we do have
What was the actual (ex post) real return?
What is the probability that the employer will hire a high skilled worker?
Participating in the market for a product are 12 consumers, each of whom will buy at most one unit of the good, and 11 suppliers, each of whom will sell at most one unit of the good. The distrib
Traditionally, how have estimated labour supply elasticities differed between men and women? How can economic theory explain this? Outline the relevant empirical evidence from the more recent literatu
Calculate the change in consumer’s surplus, change in producer’s surplus, tax revenue, and deadweight loss as a result of the policy change. Illustrate them on a graph.
Why are common borders and cultural similarities often an additional factor to determine who trades most with whom and why? Use your knowledge of the gravity model to justify your answer through two s
If 50 applicants are chosen at random, what is the probability that 17 or more of them will meet the GPA threshold? (Note: You’ll want to use your answer from part a. If you’re not s
Now, suppose that—in addition to the 20% tariff (per pair) on imported shoes—the U.S. also imposes a 10% tariff on the imported components used by the shoe industry to make each pair of sh