... demand? What is it at price of $ 12? Elasticity of demand at P=9 is PQΔQΔP=9 22 ( 2) =−18 22 =−0. 82. Elasticity of demand at P= 12 is PQΔQΔP= 12 16( 2) = 24 16=−1.5. c. What is the ... 0.1= g8 20 ⎛ ⎝ ⎞ ⎠ , or g = 0 .25 . The values for d and b may be found with equations 2. 5a and 2. 5b in Section 2. 6. We know that ES = 0 .2, P* = 2, and Q* = 20 . Therefore, 0 .2 = d 2 20⎛ ... Quantity demanded and supplied are QD = 26 26.4 -21 2.6(3.5)=18 82. 3, and QS = 1944 + 20 7(3.5) = 26 68.5. Excess supply is therefore 26 68.5-18 82. 3=786 .2 million bushels. The government must purchase...
... CPI 1980 63.1 Real price of milk 1980 $2. 98 1985 82. 3 1985 $2. 58 1990 100 1990 $1.99 1995 116.6 1995 $1.38 20 00 131.8 20 00 $1.91 20 01 135.6 20 01 $2. 43 d. What is the percentage change ... 1995 20 00 20 01 $1.88 $1. 62 $1 .25 $0.87 $1 .21 $1.54 Since 1980 the real price of butter has decreased. b. What is the percentage change in the real price (1980 dollars) from 1980 to 20 01? ... dollars) from 1980 to 20 01? Compare this with your answer in (b). What do you notice? Explain. Percentage change in real price from 1980 to 20 01 = 2. 43 2. 98=− =−0.18 18% 2. 98. This answer...
... (5,10), (10,5), (25 ,2) , and (2, 25). Erin receives a utility of .2* 10*10*5*5=500 from the bundle (10,5). Her indifference curve is represented by the equation 500=.2F 2 C 2 , or 50=FC. This ... axis, is 1 /2. Her indifference curves are straight lines with a slope of 1 /2. hamb urgersoft drin k 25 Chapter 3: Consumer Behavior 27 28 80= .2 the equation 10FC= 120 0, or FC= 120 . Some ... indifference curve are ( 12, 10), (10, 12) , (3,40), and (40,3). For Erin, this bundle gives her a utility of 28 80, so her indifference curve is given by the equation F 2 C 2 PD, or FC= 120 . This is the...
... bundlegood 1good 2 c. Finally, examine the following information about Jane’s choices: x1 x 2 P1 P 2 I Week 1 12 24 2 1 48 Week 2 16 32 1 1 48 Week 3 12 24 1 1 36 Draw ... information about the choices that Mary makes: x1 x 2 P1 P 2 I Week 1 10 20 2 1 40 Week 2 6 14 22 40 Week 3 20 10 22 60 Did Mary’s utility increase or decrease between week ... change and TR 2 = P 2 Q 2 be revenue after the price change. For computer chips: ΔTRcc = P 2 Q 2 - P1Q1 ΔTRcc = (1.1P1 )(0.8Q1 ) - P1Q1 = -0.12P1Q1, or a 12 percent decline....
... area a. Numerically: a = (21 .5-19 .2) (14.6)+(17.4-14.6) (21 .5-19 .2) (.5)=36.8 b = (17.4-14.6) (21 .5-19 .2) (.5)=3 .22 c = (21 .5-19 .2) (20 .4-17.4)=6.9 d = (21 .5-19 .2) (21 .1 -20 .5)(.5)=0.69. These numbers ... producers is equal to area A in Figure 9.6.d, which is ( 12 - 9)(6) + (0.5)(8 - 6)( 12 - 9) = $21 million. 681016 22 9 12 15SDQPABCD 20 40 Figure 9.6.d Formatted: Bullets and NumberingChapter ... curve. −0.4 = 2 23.5ΔQΔPΔQΔP=−0.4 23 .5 2 ⎛ ⎝ ⎞ ⎠ =−4.7 = b. To find the constant a, substitute for Q, P, and b into the above formula so that 23 .5=a-4.7 *2 and a= 32. 9. The equation...
... cost: MC=4Q=90-4Q=MR Q=11 .25 . For a quantity of 11 .25 , the firm will charge a price P=90 -2* 11 .25 =$67.50. The level of profit is $67.50*11 .25 -100 -2* 11 .25 *11 .25 =$406 .25 . b. Find the price, ... (38 = 55 - 2( 8.5)), i.e., (0.5)(55 - 38)(8.5) = $ 72. 25 plus the savings on each doorstep, i.e., (38 - 12) (8.5) = $22 1. Therefore, consumer surplus is $29 3 .25 . Total surplus is $26 5.50, and ... Ed = -2. 0, so 1/Ed = -1 /2; price should then be set so that: P = MC1 2 ⎛ ⎞ ⎝ ⎠ =2MC Therefore, if MC rises by 25 percent, then price will also rise by 25 percent. When MC = $20 , P...