Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Chapter 2, Problem 8PA
To determine
To analyze: the food packages provided with the remaining resources.
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Imagine a very small economy in which there are only four people and only one product. William is willing to pay $10 for one of the
product, $8 for a second, $6 for a third, $4 for a fourth, and $1 for every one after that until he has a total of twenty. James is willing to
pay $3 for every item up to 10, then he cannot buy any more because he has only $30. Adriana is willing to pay $2 for each of the first
three of the item, then $1 for a fourth, but no more. Gerardo is willing to pay $8 for one of the product, $3 for a second, and $1 for a
third, but no more
How many of this product will be sold if the price is $17 What if the price is $3?
OA 10, 25
OB. 37, 16
OC 25, 10
OD 40, 20
Stan Moneymaker needs 15 gallons of gasoline to top off his automobile’s gas tank. If he drives an extra eight miles (round trip) to a gas station on the outskirts of town, Stan can save $0.10 per gallon on the price of gasoline. Suppose gasoline costs $3.90 per gallon and Stan’s car gets 25 mpg for in-town driving. Should Stan make the trip to get less expensive gasoline? Each mile that Stan drives creates one pound of carbon dioxide. Each pound of CO2 has a cost impact of $0.02 on the environment. What other factors (cost and otherwise) should Stan consider in his decision making?
You must allocate the 70,000 seats in Reliant Stadium (in Houston) among Texan (Houston) and Cowboy
(Dallas) fans for an upcoming game between the two footfall teams. You can set different prices for
seats in the Dallas and Houston sections of the stadium. Suppose you can obtain $40/ticket from
Houston fans irrespective of the number of seats you allocate to Houston fans. You must drop price in
order to sell more tickets to Dallas fans, however. Let Q be the number of tickets you allocate to Dallas
fans. Assume that the maximum price you can charge for these tickets is given by the following inverse
demand function
P= 80
500
(a) Express the total revenue (on all 70,000 seats) from ticket sales as a function of Q;
(b) Derive the first-order condition of the revenue-maximizing problem (it's a function about Q);
(c) What is the optimal number of seats allocated to Dallas fans?
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