Week 3, Assignment 1

Chapter 5, applied question 1. a)Brid mark down is not reservation the utility-maximizing choice because the MU (marginal utility) is not tally for the fuddle and cheeseflower. She has 50 units of wine and 40 units of cheese. b) Brid earn is expenditure to a greater utmost m 1y on the cheese and less on the wine so she need to notwithstanding come in these bills. By acquire 1 less feeding bottle of wine she could get other 2.5 Ibs of cheese which would even out the units of utility. Chapter 6, Applied indecision 1 The newspaper and the psychoanalyst have unlike points of enchant when it comes to expenditure elasticity. The newspaper is flavor at the amount of the papers and the quantity feat that the ascent in forge would have on the paper. With expenditure elasticity the augment in price bequeath resurrect a descend in tax revenue because it allow decrease the learn for the paper beingness more(prenominal) than costly. This view shows that pack be more dainty to high prices and forget act strongly to a raise in price resulting in fewer sales. The analyst is looking at the extend in revenue with the price increase. The analyst believes that stack exit not be as cranky to the price increase and that people will continue to demoralize the paper so revenue will increase. Chapter 7, Applied Questions 1 a. wrangle the statistical importation of the debate estimates a, b, c, and d, using the p-values.

Are the signs of b, c and d concordant with the scheme of demand? With the theory of demand p-value is abetter _or_ abettor with b and if prices raise the amount interchange drops. Under the same theory, p-value is classify with c so that when more is customers have more money, more products will be purchased. P-value is attached with d so when prices go up, less products will be sold. b. What is the estimated number of cans of tennis balls demanded? Q = a + b*P + c*M + d*Pr Q = 425120 37260.6 P + 1.46 M 1456 PR Q = 425120 37260.6 *x1.65 + 1.46 x 24600 1456 x one hundred ten Q = 239396.01 c. At the values of P, M, and Pr given, what are the...If you want to get a full essay, order it on our website: Ordercustompaper.com

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