Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend s company and is willing to pay $30 just to spend an evening with her.

Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend s company and is willing to pay $30 just to spend an evening with her.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 1P

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Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend's company and is willing to pay $30 just to spend an evening with her. If Jia does not go out to the restaurant, she will eat at home, using groceries that cost her $8.
Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $112 for the suit: Juanita makes $26 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $26 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location. (look at screenshot) Assume that Juanita takes opportunity costs and the price of the suit into consideration when she shops. Juanita will…
Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend’s company and is willing to pay $30 just to spend an evening with her. If Jia does not go out to the restaurant, she will eat at home, using groceries that cost her $8. . Calculate Jia’s costs associated with going out to dinner with her friend. Calculate Jia’s benefits associated with going out to dinner with her friend. How I can resolve this problem
Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $102 for the suit: Store Local Department Store Across Town Neighboring City Store Local Department store Juanita makes $42 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $42 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. (Just enter the whole dollar number, no units and no cents) Across Town Travel Time Each Way (Minutes) 15 30 60 Neighboring city Price of a Suit (Dollars per suit) 102 Opportunity cost of time…
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasoline money. He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6,figureoutthepointsonJeremy’sconsumptionchoicebudgetconstraint(itmaybehelpfultodoasketch) and identify his utility-maximizing point. 3. Explain all the reasons why a decrease in a product's price would lead to an increase in purchases. 4. Asacollegestudentyouworkatapart-timejob,butyourparentsalsosendyouamonthly“allowance.” Suppose onemonthyourparentsforgottosendthecheck.Showgraphicallyhowyourbudgetconstraintisaffected.Assuming you only buy normal goods, what would happen to your purchases of goods?
Concert Tickets You are selling seats at an upcoming concert. The concert hall has a total of 8,500 seats, which will include reserved seats and general admission seats. You're selling reserved seats for $9 each and general admission seats for $5 each and are trying to decide how many of each kind of seat to offer. You want to make money on the concert, but also want people who can't afford the more expensive seats to come. You estimate your expenses for putting on the concert to be $50,000. You are hoping to make a profit, or at least break even. Assuming that you sell out the concert: a. Determine an equation for your revenue and profit as a function of the number of reserved seats you offer. b. Graph your revenue and profit equations on the same graph. What do you notice about the two functions? What does the slope of the lines represent in this situation? c. Determine how many reserved seats you would need to offer in order to break even. d. Determine how many reserved seats must…
Brenda wants to buy a new car and has a budget of $24,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 0 to 12, with 12 representing either the most styling or the best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $2,000. She also observes that as the gas-mileage index rises by one unit, the price of the car increases by $4,000. (a) Illustrate (for yourself) the various combinations of gas mileage (G) and style (S) that Brenda could select with her $24,000 budget. Place gas mileage on the horizontal axis. • Her budget line is given by 4,000*G + [ Select ] *S= [ Select ] • The X-intercept of her budget line is equal to [ Select ] • The Y-intercept of her budget line is equal to [ Select ]
Home Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $103 for the skirt: Travel Time Each Way (Minutes) Store 15 Local Department Store 30 Across Town 60 Neighboring City Marked-up price Juanita's office Price of a Skirt (Dollars per skirt) 103 85 63 Discounted price Original price C C O Ⓒ
John currently lives in Sydney where he earns $2700 a week as a high school principal. If he moves to Batemans Bay, he has to accept a position as a classroom teacher where he will earn $2100 a week. John only considers two goods, cost of living (c) and health (h). In Sydney, pe = 54 and ph = 90. In Batemans 1 1 Bay, Ph = 36. John's utility function is u(c, h) = h + cihi. a) What is John's optimal consumption of h in Sydney? b) What would be John's optimal consumption of c in Batemans Bay? c) What is the maximum cost of living ph such that John will accept to move to Batemans Bay?
Alex, who was convinced that "Football is coming home", was very excited for the World Cup last year. Unfortunately, he realized that his favourite Paul Gascoigne jersey from Euro 1996 was getting old, so he wanted to buy a new one before England's first game the following week. He could either buy a 2014 James Milner shirt from retailer A, which would make him totally happy (utility=1), or a 2006 David Beckham shirt from retailer B, which gives him a utility of 0.8. However, the shirts are not available today. There is a 50% chance that retailer A will have the shirt on the week-end, and 70% chance that retailer B will have theirs on the week-end. Due to time and work constraints, Alex can only visit one of these retailers before the tournament starts, otherwise he will have to keep his old 1996 shirt, which gives him a utility of 0.5. He can also ask his friend Nathan to check both places in the morning. But being a Welsh supporter, Nathan will not do it for free and wants some…
Alex, who was convinced that "Football is coming home", was very excited for the World Cup last year. Unfortunately, he realized that his favourite Paul Gascoigne jersey from Euro 1996 was getting old, so he wanted to buy a new one before England's first game the following week. He could either buy a 2014 James Milner shirt from retailer A, which would make him totally happy (utility=1), or a 2006 David Beckham shirt from retailer B, which gives him a utility of 0.8. However, the shirts are not available today. There is a 50% chance that retailer A will have the shirt on the week-end, and 70% chance that retailer B will have theirs on the week-end. Due to time and work constraints, Alex can only visit one of these retailers before the tournament starts, otherwise he will have to keep his old 1996 shirt, which gives him a utility of 0.5. He can also ask his friend Nathan to check both places in the morning. But being a Welsh supporter, Nathan will not do it for free and wants some money…
Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $129 for the suit: Store Travel Time Each Way Price of a Suit (Minutes) (Dollars per suit) Local Department Store 15 129 Across Town 30 86 Neighboring City 60 63 Juanita makes $50 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $50 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Complete the following table by computing the opportunity cost of Juanita's time and the total…