Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 1DQ
To determine
The error in the behavior.
Expert Solution & Answer
Explanation of Solution
Here, the individual desires and enjoys to be committed to the stupid things which leads towards heavy debts. If the actions have unforeseen consequences, we could have categorized them under the errors. But since, the individual likes to commit such actions and get into the debt issues knowingly, the actions cannot be considered as an error.
Here, even though, the individual does stupid things, he gets the desired results. Thus, they do not result in reducing the chance for the success. Thus, the stupid behavior of an individual does not constitute any systematic errors. Thus, he did not commit any errors.
Economics Concept Introduction
Concept introduction:
Error: According to theeconomists, error is an action which reduces the chance of success for an action.
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Students have asked these similar questions
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he would spend a dollar buying a first cup of coffee? LO7.2
4. Columns 1 through 4 in the following table show the marginal
utility, measured in utils, that Ricardo would get by purchasing
various amounts of products A, B, C, and D. Column 5 shows
the marginal utility Ricardo gets from saving. Assume that the
prices of A, B, C, and D are, respectively, $18, $6, $4, and $24
and that Ricardo has an income of $106. LO7.2
a. What quantities of A, B, C, and D will Ricardo purchase in
maximizing his utility?
b. How many dollars will Ricardo choose to save?
c. Check your answers by substituting them into the algebraic
statement of the utility-maximizing rule.
nuts, coffee, or both. How big would that buuget nave LU DC DCIUIU
What happens to the budget line if the government applies a specific tax of $1 per
gallon of gasoline but does not tax other goods (assuming that the consumer will
still buy more than 10 gallons per week)? What happens to the budget line if the
tax applies only to purchases of gasoline in excess of 10 gallons per week?
1.) Use the line drawing tool to draw new budget constraint with the gasoline tax
on all gallons of gasoline. Label this line 'L²₁
2.) Use the multipoint curve drawing tool to draw the new budget constraint when
the gasoline tax applies only to purchase of gasoline in excess of 10 gallons per
week. Label this line 'L³¹. (Note: Be sure to draw the entire budget constraint,
starting at a quantity of 0).
Carefully follow the instructions above, and only draw the required objects.
All other goods, Units per week
10
Gasoline, Gallons per week
L¹
Q
After plotting the final point of your multipoint curve, press the Esc key on your
keyboard to end the line.
3. Suppose you won $15 on a lotto ticket at the local 7-Eleven
and decided to spend all the winnings on candy bars and
bags of peanuts. Candy bars cost $0.75 each while bags of
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of the two products that are available.
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