Reference no: EM13923372
Problem Set 3
Data for the market for graham crackers is shown below.
Calculate the elasticity of demand between the following prices.
|
Price of crackers
|
Quantity Demanded (per month)
|
|
$3
|
80
|
|
$2.5
|
120
|
|
$2
|
160
|
|
$1.5
|
200
|
|
$1
|
240
|
$1.00 - $1.50: ___________________________________
$1.50 - $2.00: ___________________________________
$2.00 - $2.50: ___________________________________
$2.50 - $3.00: ___________________________________
If the price of graham crackers is $2.50 should firms raise or lower their prices if they want to increase revenue?
Explain this in terms of elasticity.
1. Assume the competitive market shown below faces a short run price of $10. Using the graph below, identify the following:
Profit maximizing output: _______________________
Approximate mark up over cost _______________________
In the long run, the price falls to $7.50.
Why does this happen?
What is the new profit maximizing output? _______________________
1. A local hardware store is trying to decide whether to stay open. They have found that their industry is extremely competitive and profits have shrunk considerably.
Knowing that you have taken an economics course the owners have asked for your opinion. Draw a completely labeled graph to help you explain the shutdown decision.
You should show two graphs in your answer, one for the market as a whole, and one for this store in particular.
Assume that the store is losing money; however, explain why they may want to stay open for a little while longer. (NOTE: Your answer should be a written explanation of your graph.)
2. What combination of the two goods below allows you to maximize your utility with a budget constraint of $14?
Show how you arrived at your conclusion in the space provided below.
Place your final answers on the lines at the bottom of this page.
PRICE = $0.50 per bottle
|
Bottles of glue
|
Total Utility (Utils)
|
|
1
|
15
|
|
2
|
23
|
|
3
|
30
|
|
4
|
35
|
|
5
|
38
|
|
6
|
40.5
|
PRICE = $2.00 per bale
|
Bales of hay
|
Total Utility (Utils)
|
|
1
|
10
|
|
2
|
22
|
|
3
|
36
|
|
4
|
52
|
|
5
|
70
|
|
6
|
90
|
Bottles of glue: _________________________
Bales of hay: ____________________________
|
Social and cultural fabric of the united states
: Write a 500-750-word essay that discusses and illustrates ways (people, cultural traits or customs, words, ideas, etc.) in which African communities have contributed to the social and cultural fabric of the United States.
|
|
Evaluated for its effectiveness and sensitivity screening
: A screening test for a newly discovered disease is being evaluated for its effectiveness and sensitivity as a screening test in industry. In order to determine the effectiveness of the new test, it was administered to 880 workers. Of those, 120 of..
|
|
Describe a potential conflict of interest in an investment
: Describe a potential conflict of interest in each of the following four situations: An investment advisor whose compensation is based on commissions from client trades.
|
|
Apply repeated-measures
: You will create this Word document by cutting and pasting SPSS output into Word.
|
|
Calculate the elasticity of demand and supply?
: If the price of graham crackers is $2.50 should firms raise or lower their prices if they want to increase revenue?
|
|
How many additional shares could the investor acquire
: If the investment company allowed the investor to automatically reinvest his cash distribution in additional fund shares, how many additional shares could the investor acquire?
|
|
Analysis and comparison of empirical articles
: In the previous assignment, you engaged with the Comparison Matrix, a tool for analysis and comparison of empirical articles. In this assignment, you will take the next step toward synthesis and write about your observations of the articles you co..
|
|
Percentage of customers who prefer mint chocolate chip
: Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal..
|
|
Calculate the net asset value for a share of the focus fund
: Calculate the net asset value for a share of the Focus Fund at the end of Year 1, being sure to include the cash position in the net total portfolio value.
|