Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 5.3, Problem 1ST
Suppose college students are given two options. With option A, the
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Suppose you observe a person's answer to two decision problems.
Problem 1: You are offered $40 today. What is the minimum amount x you demand one month from
today in order to be willing to give up the $40 now? Answer: x = 52.
Problem 2: Your are offered $40 today. What is the minimum amount x you demand one year from
today in order to be willing to give up the $40 now? Answer: $60.
1. Demonstrate that the rational model of time preferences is violated for this choice pattern.
2. Derive this individual's B and d for the hyperbolic time discounting model.
3. Suppose the utility you get from eating ice cream now is 10 utils. But you pay a cost of -4 utils per
hour for the next 4 hours, because it gives you indigestion and makes you feel lethargic. If your
hourly B and d for this problem are B = .6 and d = .9, ...
1. What is the total discounted utility of eating ice cream now?
2. What is your total discounted utility now of planning to eat ice cream after lunch tomorrow?
3. Do you eat ice…
You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math
Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket
only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the
afternoon working as a math tutor for less than $35. What is your opportunity cost of seeing a movie this afternoon?
Select one:
O a. $57
O b. $12
○ c. $22
○ d. $8
On Sundays, people in Los Angeles consider a boat to Catalina Island to spend the day on the beach there. The utility that a person gets from visiting Catalina is 1-[n/10] – p , where n is the number of visitors on the island and p is the price of round-trip transportation (by boat). (Note that a visitor obtains more satisfaction if there are fewer other visitors on the island). The utility of staying home is zero.
In equilibrium, how many people visit the island on a given Sunday? ( Your answer should depend on p.)
Chapter 5 Solutions
Microeconomics
Ch. 5.1 - Prob. 1STCh. 5.1 - Prob. 2STCh. 5.2 - Prob. 1STCh. 5.2 - Prob. 2STCh. 5.3 - Suppose college students are given two options....Ch. 5.3 - Prob. 2STCh. 5.4 - Prob. 1STCh. 5.4 - Prob. 2STCh. 5.5 - Prob. 1STCh. 5.5 - Prob. 2ST
Ch. 5.6 - Give an example to illustrate that someone may pay...Ch. 5.6 - Prob. 2STCh. 5.7 - Prob. 1STCh. 5.7 - Prob. 2STCh. 5.8 - Prob. 1STCh. 5.8 - Prob. 2STCh. 5.9 - Prob. 1STCh. 5.9 - Prob. 2STCh. 5.10 - Prob. 1STCh. 5.10 - Prob. 2STCh. 5.11 - Prob. 1STCh. 5.11 - Prob. 2STCh. 5.12 - Prob. 1STCh. 5.12 - Prob. 2STCh. 5 - Prob. 1QPCh. 5 - Prob. 2QPCh. 5 - Prob. 3QPCh. 5 - Prob. 4QPCh. 5 - Prob. 5QPCh. 5 - Prob. 6QPCh. 5 - Prob. 7QPCh. 5 - Prob. 8QPCh. 5 - Prob. 9QPCh. 5 - Prob. 10QPCh. 5 - Prob. 11QPCh. 5 - Prob. 12QPCh. 5 - Prob. 13QPCh. 5 - Prob. 14QPCh. 5 - Prob. 15QPCh. 5 - Prob. 16QPCh. 5 - Prob. 1WNGCh. 5 - Prob. 2WNGCh. 5 - Prob. 3WNGCh. 5 - Prob. 4WNGCh. 5 - Prob. 5WNGCh. 5 - Prob. 6WNG
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