Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 5, Problem 5.4.5PA
To determine
Whether Yosemite and other national parks are public goods.
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If a boxing fight is shown on pay-per-view television every Saturday at 4 p.m., the demand curve for each fight is given in the
accompanying graph.
Cost ($/fight)
25
20
15
10
5
0
10 20 30
40 50
Viewing households (millions)
If there is a pay-per-view charge to watch a fight, the outcome is
----because
efficient; prices will allocate the program to those who value it the most
efficient; the marginal cost of an additional viewing household is zero
O inefficient; the marginal cost of an additional viewing household is zero
O inefficient; television stations would not always make a profit
ECONOMICS
Please Show Your Work With an Explanation
This problem set explores what happens to pricing when we add network effects, which are a specific form of positive externality.
You’ve invented a 3D fax machine. This cool technology is almost like a Star Trek teleporter. You can scan an object at one machine, which creates an exact copy at another 3D fax machine. It is so valuable that as more people use it, it becomes more valuable, and the price any given user is willing to pay increases in turn.
Consider a scenario in which there are 12 possible users, who each value the fax machine at i*n, where i is the index of that user (from 1 to 12), and n is the number of other purchasing users. So, if no one buys the 3D fax machine, everyone values it at 0. However, as soon as one person buys the device, then the 12 possible users begin to value the product at 1, 2, … 12, respectively. If 2 people purchase, the 12 possible users’ valuations increase to 2, 4, … 24, and so on. Because…
Subway rides during rush hour
The subway system in your city is approximately in equilibrium. Given current
schedules, riders don't wait long for a train. Platforms are busy but not
overcrowded. In other words, rush-hour fares are such that the quantity of
rides supplied is about equal to the quantity demanded.
The directors of the system now come up with an idea to get more people out
of their cars and into the trains. Each time a rider buys a ride, 50 cents will be
automatically deposited into the rider's bank account. The funding for this
subsidy is to come from diverting a portion of gasoline taxes now paid by
motorists.
If this scheme works to increase ridership, the system is ready to provide more
rides and to adjust fares as needed to keep the system in approximate
equilibrium. When the plan goes into effect, what is likely to happen in the
diagram above?
Select one:
O a. D will increase, resulting in more rides at a higher fare.
O b. S will increase, resulting in more rides at…
Chapter 5 Solutions
Microeconomics (7th Edition)
Ch. 5 - Prob. 5.1.1RQCh. 5 - Prob. 5.1.2RQCh. 5 - Prob. 5.1.3RQCh. 5 - Prob. 5.1.4RQCh. 5 - Prob. 5.1.5RQCh. 5 - Prob. 5.1.6PACh. 5 - Prob. 5.1.7PACh. 5 - Prob. 5.1.8PACh. 5 - Prob. 5.1.9PACh. 5 - Prob. 5.1.10PA
Ch. 5 - Prob. 5.1.11PACh. 5 - Prob. 5.1.12PACh. 5 - Prob. 5.1.13PACh. 5 - Prob. 5.2.1RQCh. 5 - Prob. 5.2.2RQCh. 5 - Prob. 5.2.3RQCh. 5 - Prob. 5.2.4PACh. 5 - Prob. 5.2.5PACh. 5 - Prob. 5.2.6PACh. 5 - Prob. 5.2.7PACh. 5 - Prob. 5.2.8PACh. 5 - Prob. 5.2.9PACh. 5 - Prob. 5.2.10PACh. 5 - Prob. 5.2.11PACh. 5 - Prob. 5.3.1RQCh. 5 - Prob. 5.3.2RQCh. 5 - Prob. 5.3.3RQCh. 5 - Prob. 5.3.4PACh. 5 - Prob. 5.3.5PACh. 5 - Prob. 5.3.6PACh. 5 - Prob. 5.3.7PACh. 5 - Prob. 5.3.8PACh. 5 - Prob. 5.3.9PACh. 5 - Prob. 5.3.10PACh. 5 - Prob. 5.3.11PACh. 5 - Prob. 5.3.12PACh. 5 - Prob. 5.3.13PACh. 5 - Prob. 5.3.14PACh. 5 - Prob. 5.3.15PACh. 5 - Prob. 5.3.16PACh. 5 - Prob. 5.4.1RQCh. 5 - Prob. 5.4.2RQCh. 5 - Prob. 5.4.3RQCh. 5 - Prob. 5.4.4PACh. 5 - Prob. 5.4.5PACh. 5 - Prob. 5.4.6PACh. 5 - Prob. 5.4.7PACh. 5 - Prob. 5.4.8PACh. 5 - Prob. 5.4.9PACh. 5 - Prob. 5.4.10PACh. 5 - Prob. 5.4.11PACh. 5 - Prob. 5.4.12PACh. 5 - Prob. 5.1CTECh. 5 - Prob. 5.2CTE
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