Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 5, Problem 1SPA
To determine
Identify the role of market price in the allocation of resources.
Expert Solution & Answer
Explanation of Solution
There are different methods for the allocation of scarce resources. In this case, these three restaurants follow the method of first come–first server system. In the case of third restaurant, reservations are not accepted. Thus, this restaurant directly uses the method of first come–first serve system.
In the case of second restaurant, reservations are recommended. Thus, this restaurant needs to follow the combination immediate first come–first serve system, and the reservation based on first come - first serve system.
In the case of first restaurant, reservations are essential. So, the method of first comes–first serve system is used here where the person making reservation for a table at a time is allocated the table at that particular time.
In accordance to the quantity of costumers arrived, the price of a table will vary from one hour to the next hour. Thus the customers will be highly uncertain about the price. This will cause to decline the demand and thereby lowers the profit of the restaurant.
Economics Concept Introduction
Resource allocation methods: Resource allocation methods are used to manage resources efficiently and fairly. If the resources are abundant, then it allocates for alternative uses. If the resources are scarce, then it is allocated somehow.
Method of first come and first serve system: The method of first come and first-serve system allocates resources to those people who are first in line.
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Students have asked these similar questions
Suppose that in a competitive market for ukuleles, three buyers (Peter, Paul, and Mary) have the marginal benefit (MB) schedules below.
Quantity
MB—Peter
MB—Paul
MB—Mary
1
150
140
130
2
120
110
100
3
90
80
70
4
60
50
40
5
30
20
10
If the equilibrium price is $80, calculate the quantity purchased by each buyer.
Recently, the price of fuel has increased in Bangladesh. At the same time the Government of Bangladesh has been allowing several producers to start car production in Bangladesh. Assume, the effect of fuel price increase is lower that that from increased number of car producers.
(a) Discuss the possible effects on the equilibrium price and equilibrium quantity in the car market.
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maximum.
The following diagram shows supply and demand in the market for tablets.
Use the black point (plus symbol) to indicate the equilibrium price and quantity of tablets. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus.
Chapter 5 Solutions
Macroeconomics
Ch. 5.1 - Prob. 1RQCh. 5.1 - Prob. 2RQCh. 5.1 - Prob. 3RQCh. 5.1 - Prob. 4RQCh. 5.2 - Prob. 1RQCh. 5.2 - Prob. 2RQCh. 5.2 - Prob. 3RQCh. 5.2 - Prob. 4RQCh. 5.2 - Prob. 5RQCh. 5.2 - Prob. 6RQ
Ch. 5.3 - Prob. 1RQCh. 5.3 - Prob. 2RQCh. 5.3 - Prob. 3RQCh. 5.4 - Prob. 1RQCh. 5.4 - Prob. 2RQCh. 5.4 - Prob. 3RQCh. 5.4 - Prob. 4RQCh. 5 - Prob. 1SPACh. 5 - Prob. 2SPACh. 5 - Prob. 3SPACh. 5 - Prob. 4SPACh. 5 - Prob. 5SPACh. 5 - Prob. 6SPACh. 5 - Prob. 7SPACh. 5 - Prob. 8SPACh. 5 - Prob. 9SPACh. 5 - Prob. 10SPACh. 5 - Prob. 11APACh. 5 - Prob. 12APACh. 5 - Prob. 13APACh. 5 - Prob. 14APACh. 5 - Prob. 15APACh. 5 - Prob. 16APACh. 5 - Prob. 17APACh. 5 - Prob. 18APACh. 5 - Prob. 19APACh. 5 - Prob. 20APACh. 5 - Prob. 21APACh. 5 - Prob. 22APACh. 5 - Prob. 23APACh. 5 - Prob. 24APACh. 5 - Prob. 25APACh. 5 - Prob. 26APACh. 5 - Prob. 27APA
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