True or False: Keeping his maximum willingness to pay for an apartment in mind, Brian will buy the apartment because it would be worth more to him than its market price of $300,000.
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- 4. Consumer surplus for an individual and a market The following graph shows Becky's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line. PRICE (Dollars per slice) 7.50 6.75 6.00 + 5.25 Demand 4.50 + 3.75 3.00 2.25 + 1.50 + 0.75 + 0 0 Price 2 Becky's Weekly Demand P 4 6 8 10 12 14 QUANTITY (Slices of cheesecake) 16 18 20 ? From the previous graph, you can tell that Becky is willing to pay for her 8th slice of cheesecake each week. Because she has to pay only $3.00 per slice, the consumer surplus she gains from the 8th slice of cheesecake is $ Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Becky would receive a consumer surplus of S 8th slice of cheesecake she buys. from the01. Suppose there is only 1 product in the economy and that's Pizza, whoever wants to pay for pizza can be able to enjoy pizza. There two people Chris and Phill. Both are willing to pay 150$ for this pizza, but with this amount Chris wants to have 2 pizzas whilst Phill wants to have 3 pizzas. Being a pizza supplier by which method you can determine their demands for pizza and how can you ensure the market equilibrium. Support your answer with graph(s).8. Consumer surplus using utility curves Suppose Rina has an allowance of $44 to spend on movies and other goods each month (represented by hudget constraint CF). The following graph shows her initial utility (₁) at point A from spending $27 of her total allowance on three movies ($9 each) and the remaining $17 on other goods. Note: Select a point on the graph to see its coordinates. MONEY SPENT ON OTHER GOODS 60 R 00 40 30 10 0 0 D Р 9 G 18 MONEY SPENT ON MOVIES 45 81 Now suppose Rina's parents decide not to allow her to see movies. As a result, she now spends all of her allowance on other goods, moving her to point At this paint, her utility is, it was at point A. Although her parents do not want her to see movies, they don't want to reduce the overall utility Rina gets from her allowance; therefore, they decide to increase her total monthly allowance by just enough to make her as happy as she was when she was allowed to see movies. This amount is represented by the distance between…
- Refer to the graph below. Assume that the initial equilibrium in the market for bus rides is point A (30 rides per week). The price of bus rides increases and the equilibrium shifts to point B (20 rides per week). The income effect of the change in consumer behavior is the $ of other consumption 45 40 35 30 25 20 15 10 5 T T T T T T L B C A 5 10 15 20 25; 30 35 40 45 26 # of bus rides per week decrease of consumption by 4 decrease of consumption by 6 increase of consumption by 6Suppose that Michelle buys a cappuccino from Paul's Cafe and Bakery for $5.75$5.75. Michelle was willing to pay up to $7.75$7.75 for the cappuccino, and Paul's Cafe and Bakery was willing to accept $2.25$2.25 for the cappuccino. Based on this information, answer the following questions. Michelle's consumer surplus: $ Paul's Cafe and Bakery's producer surplus: $Suppose Yvette just sat down to enjoy the Double Stack burger that she purchased for $1.00. Her friend, Sean, would also like a Double Stack burger, but he strongly dislikes standing in line. Sean offers to buy Yvette's Double Stack rather than wait in line himself and pay $1.00. The following table shows some hypothetical offers Sean might make for Yvette's burger. First, compute the consumer surplus Yvette gets from buying the burger for $1.00, refusing Sean's offers, and eating the burger. Enter these amounts in the second column of the following table. Next, compute the consumer surplus she gets from buying the first burger at $1.00, selling it to Sean at each price listed, purchasing another burger for $1.00, and consuming it. Enter these amounts in the third column of the table. Again, assume that Yvette's cost of waiting in line for a burger is zero. Note: If Yvette is willing to sell her burger to Sean while at the Wendy's restaurant, she would purchase another burger…
- Suppose you consume 3 pounds of beef and 5 pounds of pork per month. The price of beef is $1.50 per pound, and pork is $3.00 per pound. Assuming you have studied economics and achieved consumer equilibrium, the ratio of your marginal utility of beef to your marginal utility of pork isECON 212 Assignment #3 1. Assume that Hurricane Dorian destroyed thousands of crawfish traps. Explain and illustrate what would happen to the consumer surplus of crawfish consumers. 2. A buffet restaurant charges $70.00 per person. Use the utility theory to explain how this price was determined. How much would the customer (person) eat? Use an illustration to support your response. 3. Assume that new homes and luxury cars are normal goods. As discussed in class explain and illustrate the income and substitution effects for these goods. 4. Use your understanding of the indifference analysis to explain the relationship between junkanoo and carnival if the cost of junkanoo products increases. Assume that these goods are substitute goods.4. On Thursday nights, Hacienda Pizza Co. has a pasta special. Jacob likes the restaurant's pasta, and his willingness to pay for each serving is shown in the accompanying table: Willingness to pay for pasta (per serving) $10 Quantity of Pasta (servings) 1 $8 3 $6 4 $4 $2 6. $O a. If the price of a serving of pasta is $5, how many servings will Jacob buy? How much consumer surplus does he receive? b. The following week, Jacob is back, but now the price of a serving is $6. By how much does his consumer decrease compared to the first week? c. One week later, he goes to the restaurant again. He discovers that the restaurant is offering an "all you can eat" special for $25. How much pasta will Jacob eat, and how much consumer surplus does he receive now? d. Suppose you own Hacienda Pizza Co and Jacob is a "typical" customer. What is the highest price you can charge for the “all you can eať" special and still attract customers?
- The following table indicates Sharona’s marginal utilities from the additional consumption of goodsA and B. The first and third columns of the table show the quantities of goods A and B consumed.The second and the fourth columns show Sharona’s marginal utilities from each additional unit ofgoods A and B consumed. The price of A is $2 per unit, and the price of B is $4 per unit. IfSharona’s budget is $12, then what consumer equilibrium combinations would maximize her totalutility?Table 6.6QA MUA QB MUB1 24 1 482 22 2 443 18 3 364 12 4 24Suppose that a consumer perceives X and AOG (all other goods) to be perfect (one-for-one) substitutes. The consumer has an income of $100 and the price of x is 80 cents. If the price of x rises to 1.20, what is the resulting change in consumer surplus? Show work and explainThe 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 0 100 120 134 144