EBK MICROECONOMICS
5th Edition
ISBN: 9781118883228
Author: David
Publisher: YUZU
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Chapter 5, Problem 5.26P
To determine
Market
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Students have asked these similar questions
Assume that Bob's utility function over beer x and pizza y is U(x,y) = 4x+12y. Which
of the following statements is false?
If the price of pizza is 15 and the price of beer is 5, the own price elasticity of the
demand for pizza as well as beer is infinite.
It the price of pizza is 15 and the price of beer is 4, Bob purchases only beer
If the price of pizza is 16 and the price of beer is 5, then Bob only purchases
pizza.
If the price of pizza is 12 and the price of beer is 4, then we can't determine how
much pizza relative to beer Bob purchases.
Pizza and beer are perfect substitutes.
Suppose that Paolo and Sharon are the only consumers of ice cream cones in a particular market. The following table shows their monthly demand schedules:
Price
Paolo’s Quantity Demanded
Sharon’s Quantity Demanded
(Dollars per cone)
(Cones)
(Cones)
1
8
16
2
5
12
3
3
8
4
1
6
5
0
4
On the following graph, plot Paolo’s demand for ice cream cones using the green points (triangle symbol). Next, plot Sharon’s demand for ice cream cones using the purple points (diamond symbol). Finally, plot the market demand for ice cream cones using the blue points (circle symbol).
Note: Line segments will automatically connect the points. Remember to plot from left to right.
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…
Chapter 5 Solutions
EBK MICROECONOMICS
Ch. 5 - Prob. 1RECh. 5 - Prob. 2RECh. 5 - Prob. 3RECh. 5 - Prob. 4RECh. 5 - Prob. 5RECh. 5 - Prob. 6RECh. 5 - Prob. 7RECh. 5 - Prob. 8RECh. 5 - Prob. 9RECh. 5 - Prob. 10RE
Ch. 5 - Prob. 5.1PCh. 5 - Prob. 5.2PCh. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Prob. 5.5PCh. 5 - Prob. 5.6PCh. 5 - Prob. 5.7PCh. 5 - Prob. 5.8PCh. 5 - Prob. 5.9PCh. 5 - Prob. 5.10PCh. 5 - Prob. 5.11PCh. 5 - Prob. 5.12PCh. 5 - Prob. 5.13PCh. 5 - Prob. 5.14PCh. 5 - Prob. 5.15PCh. 5 - Prob. 5.16PCh. 5 - Prob. 5.17PCh. 5 - Prob. 5.18PCh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21PCh. 5 - Prob. 5.22PCh. 5 - Prob. 5.23PCh. 5 - Prob. 5.24PCh. 5 - Prob. 5.25PCh. 5 - Prob. 5.26PCh. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29PCh. 5 - Prob. 5.30PCh. 5 - Prob. 5.31PCh. 5 - Prob. 5.32PCh. 5 - Prob. 5.33P
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Similar questions
- Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?arrow_forwardWhen and economist says the demand, for a product has increases, he or she mean that a) consumers are willing and able to purchase more at any given price. b) the demand curve has shifted to the left c) The product has become more scarce and consumers therefore want it more d)Consumers would be willing and able to pay less to recieve the same quantity. e)The price has decreased and consumers will therefore purhcase more of the productarrow_forward
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