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Marginal Rate of Technical Substitution
MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.
Preferences and Utility Analysis
Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.
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- Explain the impact of each of the following scenarios on ONLY the market for apples in Gauteng.• State whether each of the following scenarios will impact the demand or the supply curves for apples.• State whether the impact will shift the curve or cause a movement along the curve.• If it is a shift, state the direction of the shift and motivate your answer. Q.2.1.1Eating apples is considered unhealthy, ceteris paribus.Q.2.1.2The number of firms selling apples in Gauteng has decreased.Q.2.1.3The price of bananas (a substitute in consumption) has increased.Q.2.1.4The price of input costs has increased, ceteris paribus.Q.2.1.5Household incomes have increased. Assume that apples are a normal good.QUESTION 5. "At the optimal consumption the MRS and ratio of prices between two goods must be equal.” i. Intuitively why is the statement true? ii. When might it be false?If a good is free, when will a consumer stop wanting to buy the good? Once the total utility equals zero At the quantity where marginal utility is at its maximum Once the marginal utility equals zero When marginal utility is negative Once the marginal utility equals total utility What is used to measure a consumer's entire satisfaction or happiness of a choice? Total utility Marginal cost Marginal utility Total Revenue Total costs Which of the following best defines the term utility as it is used by economists? when a market allocates resources in a way that maximizes consumer and producer surplus
- 4. 1).Find the marginal utility of each of the two commodities? If the two commodities are free, what are the consumed quantities of the two commodities? 2) .If the price of X is two Riyals and the price of Y is 4 Riyals, and the income is 32, find the equilibrium quantities? 3) .If the price of Y drops to two Riyals, find the equilibrium quantities? Explain the graph?In a competitive market, what should consumer do if the marginal utilities/prices ratios are NOT same for all goods? Please explain by referring to MRS.Find solutions for your homework business economics economics questions and answers 2.suppose that a busy restaurant charges $9 for its octopus appetizer. at this price, an average of 48 people orders the dish each night. when it raises the price to $12, the number ordered per night falls to 42. assuming that demand is linear, find the demand curve the restaurant faces. what price should the restaurant Question: 2.Suppose That A Busy Restaurant Charges $9 For Its Octopus Appetizer. At This Price, An Average Of 48 People Orders The Dish Each Night. When It Raises The Price To $12, The Number Ordered Per Night Falls To 42. Assuming That Demand Is Linear, Find The Demand Curve The Restaurant Faces. What Price Should The Restaurant This problem has been solved! See the answer 2.Suppose that a busy restaurant charges $9 for its octopus appetizer. At this price, an average of 48 people orders the dish each night. When it raises the price to $12, the number ordered per night…
- Based on Nick's willingness to sell, plot his supply curve as a step function on the following graph using the orange points (square symbol). Be sure to plot your first point at (0, 0). Price of Water 10 9 100 8 7 8 10 3 2 1 0 0 2 3 Quantity of Water Suppose the price of a bottle of water is $4. In this case, Nick receives $ 5 If the price rises to $6, Nick now sells Nick's Supply Price = $4 Use the black line (plus symbol) to draw a price line at $4. Next use the grey point (star symbol) to indicate how many bottles of water Nick will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Nick's producer surplus. bottles of water. This Quantity Sold Producer Surplus in producer surplus from his water sales. his producer surplus to $1. Doug consumes two goods, electricity, e, and a composite commodity z. Doug has the following utility function: U = z²-e Last week, he clicked on a Facebook ad and got free solar panels put on his roof! Now Doug has solar panels on his roof that generate 50 units of electricity per day. For the going price of electricity, if Doug demands more than 50 units of electricity, he can buy more at that price. If he demands less than 50 units, he can sell the extra electricity (50 - his consumption) back to the grid, and earn the going price as extra income. a. What are his Marshallian demand functions for e and z? b. Currently, Doug's income is $100 per day, the price of z is $1 and the price of electricity is $0.50. How much electricity is he consuming and what is his utility? (note, the utility numbers may get a bit large). C Calculate quantity demanded for electricity and his utility if the price of electricity rises to $1. And then calculate the quantity demanded and utility when the…If only the prices of goods in a two-good society quadruple, what will happen to the budget line? A Insufficient information is given to determine what effect the change will have on the budget line but we know society is worse-off. There will be no effect on the budget line. C The slope of the budget line may either increase or decrease. D The intercepts of the budget line will increase.
- 7. Professor Petro considers coffee from La Prep (denoted as good I) and coffee from Tim Horton's (denoted as good h) to be perfect substitutes but he derives much more utility from La Prep coffee. In fact, he thinks 1 cup of coffee from La Prep is as good as 4 cups of coffee from Tim Hortons! This means his utility function over the two coffees is given by U = 4l +h. The price of La Prep coffee is p = 3 and the price of Tim Horton's coffee is pa 1.5. Professor Petro sets aside a total income of m = 60 for coffee each week. For the questions below, treat La Prep coffee (good !) as the good that goes on the horizontal axis of an indifference curve diagram. (b) Solve for Professor Petro's optimal bundle of La Prep and Tim Horton's coffee, (, h"). Show your solution graphically by placing La Prep coffee on the horizontal axis and Tim Horton's coffee on the vertical axis. Label Professor Petro's optimal bundle as bundle "A" and be sure to label all intercepts of the budget line.ii. What type of goods are petrol and gas if XED = 0.5? Complementary and High responsiveness Complementary and Low responsiveness Neutral Substitute and High responsiveness Substitute and low responsiveness01. Suppose there is only 1 product in the economy and that's Pizza, whoever wants to pay for pizza can be able to enjoy pizza. There two people Chris and Phill. Both are willing to pay 150$ 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).