There are two types of consumers for ice cream. The first type likes ice cream and the inverse demand is given by P = 5 - Q/2 . The second type is crazy about ice cream and the inverse demand is given by P = 20 - Q/2. There are 10 people from each type. Find the market demand
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There are two types of consumers for ice cream. The first type likes ice cream and the inverse demand is given by P = 5 - Q/2 . The second type is crazy about ice cream and the
inverse demand is given by P = 20 - Q/2. There are 10 people from each type. Find the market demand.
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- Anon is a graduate student at Lock Haven University studying human behavior. Three subjects, Felicity, Terrance, and Lola, listed their utility for pineapple and watermelon. Anon believes he will be able to tell which subject likes pineapple the most by referring to the levels of utility each one reported. His adviser, Dr. Util, tells him his research is flawed. Explain why Dr. Util feels this way.When the price of sugar was "low," consumers in the United States spent a total of $3 billion annually on its consumption. When the price doubled, consumer purchases actually decreased to $2 billion annually. This indicates that Multiple Choice the demand curve for sugar is upward sloping. the demand for sugar is elastic. sugar is a Giffen good. the demand for sugar is relatively inelastic. OSuppose we have a market with 200 individuals with preferences over two goods, x and y. 1. Consider that all 200 individuals have the utility function U = x²/3y¹/3 and that each individual has the same income and is subject to the same prices. Calculate the market demand for x as a function of income and prices. 2. Find the own price elasticity of demand for good x. Is the elasticity constant or is it changing at different values of P? 3. Suppose now that we know m = 135, P = 3, 4. What is the market demand for x? This should be a number. and Py 4. Consider now that 100 individuals (type A) have the utility function U = x²/³y¹/³ and the other 100 (type B) have the utility function U = x¹/3y2/3. Each individual still has the same 'y income and is subject to the same prices. Calculate the market demand for x as a function of income and prices. 5. Suppose now that we know m = 250, P = 5, and Py 3. What is the market demand for x? This should be a number. = =
- Elsie sells homemade lemonade. If she prices a glass of lemonade at $3, she sells 12 glasses a day. If she gives a $0.50 discount (per glass), she can sell 3 more glasses per day. Write a linear demand equation q = mp + b, where p is the price per glass, and q is the number of glasses she can sell per day. Suppose that it costs her 20 cents a glass to make lemonade. There is no fixed cost. Write down the revenue function, cost function, and profit function as functions of p. How much should she charge per glass to maximize her profit? What is the maximum profit?The rules of politics are not always the same as the rules of economics. In the discussions of setting budgets for government agencies, there is a strategy called closing the Washington monument. When agency faces the unwelcome prospect of a Budget cut, it may decide to close a high visibility attraction enjoyed by many people like the Washington monument. Explain in the terms of diminishing marginal utility why the Washington monument strategy is so misleading if you are really trying to make the best of a budget cut, should you cut the items in your budget with the highest marginal utility or the lowest marginal utility? Does the Washington monument strategy cut the items with the highest or lowest.Many advertising slogans seem to be asserting something about people's preferences. How would you capture the following slogans with a mathematical statement about the utility function? Either find a utility function for each of the examples or discuss what properties should it have. a) Promise margarine is just as good as butter. b) Things go better with Coke. c) You can't eat just one Pringle's potato chip. d) Krispy Kreme glazed doughnuts are just better that Dunkin' Donuts
- Greg, Rob and Soroush all have different demands for coffee. Greg’s demand is given by Qg = 6 − P. Rob’s demand is given by Qr = 8 − 2P. Soroush’s demand is given by Qs = 6 − 1 2 P. (a) Derive the market demand curve for coffee. (b) Graph the market demand curve with an emphasis on the kinks.Ravi's utility function for various combinations of X and Y satisfy all the axioms of choice. Given his budget constraint, it has also been observed that the cross-price elasticity of demand between X and Y is zero as the price of X falls. Given this scenario, comment with an appropriate diagram, what kind of commodity is Y?Kari and Hector both are interested in buying pizza slices for lunch. Kari's inverse demand for pizza slices is given by P = 250 – ()Q, where Pis the price of a pizza slice (in cents) and Q is the number of slices. Hector's inverse demand is given by P = 150 -)0. Suppose that Kari and Hector are the only two consumers in the market for pizza slices. Assuming that both Kari and Hector are consuming some pizza each, which of the following functions describes the relevant portion of the market demand curve? Choose one: O A. Q = 0 – (4 + 10)P - 400 В. Р%3D 400 + ( 4+10 C. P = – 400Q (4+10) O D. Q %3D 2,500 — (4 + 10)Р O O
- The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called “closing the Washington Monument.” When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is so misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with the highest marginal utility or the lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or the lowest marginal utility?Tom had an "absolute need" for web help and therefore was ready to "pay anything" to get it. If this were true, what shape would his demand curve have? Why isn't this realistic?Kari requests two goods: X and Y. The utility function is given by: U(XY)=X-Y. Prices of X and Y is Px and Py, and budget is of m dollars. a) Deduce Karis demand for good X and Y b) Suggest price X and Y is showed by Px = 4 and Py = 2 and income, M, is 30. How much will she demand of X and Y? c) Karis wage is doubled. How does this affect her adjustment? Show graphically and mathematically d) is good X and Y normal or inferior goods?
