Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 6TY
To determine
To construct the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $120.
Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and blue (circle symbols) for Carlos. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $120. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)
Based on the information on the previous graph, you can tell that____will buy tablets at the given market price, and total consumer surplus in this market will be___
Suppose the market price of a tablet decreases…
The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $80.
Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Larry, green (triangle symbols) for Megan, purple (diamond symbols) for Raphael, tan (dash symbols) for Susan, and blue (circle symbols) for Alex. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $80. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)
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.
Chapter 5 Solutions
Microeconomics: Principles & Policy
Knowledge Booster
Similar questions
- Salima is a devoted coca cola consumer, whereas Antonia can drink either coca cola or Pepsi products. Salima's demand for coca cola will be ______, while antonia's demand will be relatively more _______.arrow_forwardYou may have observed that items such as different brands of aspirin, tomato sauce, or gasoline are typically priced the same as each other. This is particularly true when consumers can find these goods in close proximity to each other. For example, prices are often the same at gas stations that are on opposite sides of the street. Prices are also generally the same for products next to each other on the same grocery store shelf. Choose the correct fill in the blank. The aforementioned examples are goods that are likely to be substitutes or complements You would expect the value of the cross-price elasticity to be insignificant, small, or large because the opportunity cost of getting information on price is low.arrow_forwardEconomist George Stigler once wrote that, according to consumer theory, “if consumers do not buy less of a commodity when their incomes rise, they will surely buy less when the price of the commodity rises.” What kind of commodity was Stigler referring to? A normal good An inferior good When the price of this commodity rises, the substitution effect is (positive / negative) and the income effect is (positive / negative). So the net result for consumption of this commodity (depends on which effect dominates / is a decrease / is an increase).arrow_forward
- 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 Oarrow_forwardComplementary goods are goods that are closely related. Choose the example below that best describes complementary goods. Sally planned to eat lunch at McDonald's, but it was closed. She decided to go to Wendy's for lunch instead. Tom went to the store to buy groceries. He had cherry soda on his list, but he decided to buy lemon-lime soda instead. The lemon-lime soda was on sale, so it was a better deal. In the spring, the demand for tennis rackets goes up. This causes the potential demand of tennis balls to also go up. December is the most popular month of the year to bake cookies. This causes the demand for butter to go up and the cost of margarine to go down.arrow_forwardTwo students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys more beer when the price of beer goes up, then beer must be an inferior good for Frodo. If, on the other hand, he buys less beer when the price of beer goes up, then beer must be a normal good for Frodo. Sofia disagrees: "Normal and inferior goods are about income changes, not price changes. Therefore, we do not have enough information: beer could be an inferior or normal good in either of these cases." Do you agree or disagree? Carefully explain your point of view. Support your argument with graphs of income, substitution and total effects (please put beer on the horizontal axis and the other goods on the vertical axis). Please assume that Frodo's preferences over beer and other goods are strictly convex and satisfy "more is better" assumption.arrow_forward
- 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?arrow_forwardGrubHub, a food delivery service, has recently expanded to your area. The accompanying table contains the number of deliveries per month that you demand at various delivery prices. Use this information to plot (draw) your individual demand curve. Describe the slope of your individual demand curve. Price Deliveries $10 2 $7 4 $5 6 $4 8 $2 10 $1 12arrow_forwardEconomists assume that consumers choose the best bundle of goods they can afford. True or false?arrow_forward
- In workout problem 8.4, Maude thinks delphiniums and hollyhocks are perfect substitutes, one for one. If delphiniums currently cost $3 per unit and hollyhocks cost $4 per unit and if the price of delphiniums rises to $6 per unit, the income effect of the change in demand for delphiniums will be bigger than the substitution effect. there will be no change in the demand for hollyhocks. the entire change in demand for delphiniums will be due to the substitution effect. 1/3 of the change in demand will be due to the income effect. 2/3 of the change in demand will be due to the income effect.arrow_forwardWho introduced utilityarrow_forwardYou have just opened a new grocery store. Every item you carry is generic (generic beer, generic bread, generic chicken, etc.). You recently read an article in the Wall Street Journal reporting that the price of recreation is expected to increase by 15 percent. How will this affect your store’s sales of generic food products?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning