... P
2
Q
2
- P
1
Q
1
Δ
TR
cc
= (1.1P
1
)(0.8Q
1
) - P
1
Q
1
= -0 .12P
1
Q
1
, or a 12 percent decline.
For disk drives:
Δ
TR
dd
= P
2
Q
2
- P
1
Q
1
Δ
TR
dd
= (1.1P
1
)(0.9Q
1
) - P
1
Q
1
... the increase in the price of the toll from $5 to
$7.
The lost consumer surplus is ( 7-5 )*16+0.5( 7-5 )(2 0-1 6)=$36.
14. Vera has decided to upgrade the operatin...
... the
current minimum wage, go to
http://www.bls.gov/cpi/home.htm
Click on: Consumer Price Index- All Urban Consumers (Current Series)
Select: U.S. All items
5
Chapter 1: Preliminaries
1
... 0.6Q
e
=0.6(154 4-1 76P)=926. 4-1 05.6P. Graphically,
export demand has pivoted inwards as illustrated in figure 2.5a below.
Total demand becomes
Q
D
= Q
d
+ 0.6Q
e
= 1700 - 107P + 926. 4-1 05.6P = 2626.4 - ... that the long-run demand and competitive supply curves are indeed given by
D = 32.18 - 0.51P
S
C
= 7.78 + 0.29P.
As above, E
S
= 0.4 and E
D
= -0 .4:...
... decreases.
When she buys the 8-ounce soft drink she pays
$1.50
8 oz
= $0.19 per oz.
When
she buys the 12-ounce size she pays $0.17 per ounce, and when she buys the 1 6-
ounce size, she pays $0.14 ... 600 clothing and 600 food
would cost ($3)(600)+($2)(600)=$3000.
Therefore, the Laspeyres cost-of-living index is:
L = 100($3000/$1200) = 250.
Ideal Index
35
Chapter 3: Consumer Beha...
...
σ
2
= (0.5)(0 - 1.025)
2
+ (0.25)(1 - 1.025)
2
+ (0.2)(2 - 1.025)
2
+ (0.05)(7.5 - 1.025)
2
, or
σ
2
= $2.812.
b. Richard’s nickname is “No-risk Rick.” He is an extremely risk-averse individual. ... probabilities:
σ
2
= (0.2)(125 - 80)
2
+ (0.3)(100 - 80)
2
+ (0.5)(50 - 80)
2
= $975.
c. What would a risk-neutral person pay to play the lottery?
A risk...
... case?
a. A firm can hire only full-time employees to produce its output, or it can hire some
combination of full-time and part-time employees. For each full-time worker let go,
the firm must ... requires exactly two full-time workers to operate each piece of machinery in
the factory.
This firm operates under a fixed proportions technology, and the isoquants are L-
shaped. The firm cannot...
... the reverse.
For example, let a = 0, b = 1, c = -1 , d = 1. Total cost is Q - Q
2
+ Q
3
; average cost
is
1 - Q + Q
2
; and marginal cost is 1 - 2Q + 3Q
2
. Minimum average cost is Q = 1/2
and ... calculate average cost this year:
AC
1
= 10 - 0.1Q + 0.3q = 10 - (0.1)(40) + (0.3)(10) = 9.
Second, calculate the average cost next year:
AC
2
= 10 - (0.1)(50) +...
... area a.
Numerically:
a = (21. 5-1 9.2)(14.6)+(17. 4-1 4.6)(21. 5-1 9.2)(.5)=36.8
b = (17. 4-1 4.6)(21. 5-1 9.2)(.5)=3.22
c = (21. 5-1 9.2)(20. 4-1 7.4)=6.9
d = (21. 5-1 9.2)(21. 1-2 0.5)(.5)=0.69.
These numbers ... 9.6.d,
which is
(12 - 9)(16) + (0.5)(12 - 9)(22 - 16) = $57 million.
The gain to domestic producers is equal to area A in Figure 9.6.d, which...