7) Fill in the missing information in the following tables. For each table, use the information provided to identify a possible trade. Then identify the final allocation and a possible value for the MRS at the efficient solution. (Note: There is more than one correct answer.) Illustrate your results using Edgeworth Box diagrams. a. Norman's MRS of food for clothing is 1 and Gina's MRS of food for clothing is 4: Individual Norman Gina Initial Allocation 6F, 2C 1F, 8C Individual Trade b. Michael's MRS of food for clothing is 1/2 and Kelly's MRS of food for clothing is 3. Initial Allocation Final Allocation Trade Final Allocation

7) Fill in the missing information in the following tables. For each table, use the information provided to identify a possible trade. Then identify the final allocation and a possible value for the MRS at the efficient solution. (Note: There is more than one correct answer.) Illustrate your results using Edgeworth Box diagrams. a. Norman's MRS of food for clothing is 1 and Gina's MRS of food for clothing is 4: Individual Norman Gina Initial Allocation 6F, 2C 1F, 8C Individual Trade b. Michael's MRS of food for clothing is 1/2 and Kelly's MRS of food for clothing is 3. Initial Allocation Final Allocation Trade Final Allocation

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.2P

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3. Jane is currently consuming 4 glasses of milk and 10 cookies, while Betty is consuming 9 glasses of milk and 3 cookies. Jane views milk and cookies as perfect substitutes (her MRS is 1), while Betty prefers cookies to milk and is willing to give up 3 glasses of milk to get 1 cookie. Is the current allocation of milk and cookies Pareto efficient? Explain with use of a diagram.
ECON 212 Assignment #3 1. Assume that Hurricane Dorian destroyed thousands of crawfish traps. Explain and illustrate what would happen to the consumer surplus of crawfish consumers. 2. A buffet restaurant charges $70.00 per person. Use the utility theory to explain how this price was determined. How much would the customer (person) eat? Use an illustration to support your response. 3. Assume that new homes and luxury cars are normal goods. As discussed in class explain and illustrate the income and substitution effects for these goods. 4. Use your understanding of the indifference analysis to explain the relationship between junkanoo and carnival if the cost of junkanoo products increases. Assume that these goods are substitute goods.
learn-eu-central-1-prod-fleet01-xythos.content.blackboardcdn.com Imagine there is an outbreak of 'mad sheep' disease, which wipes out a considerable portion of the sheep population in Scotland. This results in a shortage of Haggis and an increase in its price. a) Show the effect of this price increase on Angus' budget line and optimal choice, and explain the forces underpinning this outcome. (Hint: Consider substitution and income effects). b) Assuming that Haggis' price continues to increase over the subsequent months, derive the demand curve for Haggis. c) Discuss the income and substitution effects within the context of this price increase assuming that Haggis is an inferior good. 2 26% 1
10. Consumer A and B have each been given an allocation of 2 goods x and y (assume each has positive amounts of both goods). At this allocation, consumer A has an MRS of 2, while consumer B has an MRS of 1/2. Could this allocation be Pareto efficient? Explain why or why not.
You are an Uber driver in Washington D.C. who earns $70 for a day's work. You have been offered a ticket to watch the Washington National play all day for $40. As a baseball fan, you value the experience at $100. With this information, what can we say? 2.“Pareto efficiency is an important concept in economics, it tells us which of any two allocations to prefer." Is this statement true or false? Explain your answer.
If a good is free, when will a consumer stop wanting to buy the good? Once the total utility equals zero At the quantity where marginal utility is at its maximum Once the marginal utility equals zero When marginal utility is negative Once the marginal utility equals total utility What is used to measure a consumer's entire satisfaction or happiness of a choice? Total utility Marginal cost Marginal utility Total Revenue Total costs Which of the following best defines the term utility as it is used by economists? when a market allocates resources in a way that maximizes consumer and producer surplus
1. True/False: Partial equilibrium analysis only concerns supply or demand alone, whereas general equilibrium analysis concerns supply and demand simultaneously. 2. True/False: In general equilibrium analysis, an allocation is said to be as a reasonable allocation if each consumer consumes the same bundle its value is no more than the value of the consumer's income. 3. True/False: In general equilibrium analysis, an allocation is said to be as a reasonable allocation if each consumer consumes the same bundle its value is no more than the value of the consumer's income.
Explain how non-convexity in choice can result in multiple optimal choices. Provide a graphical solution.
This is from Microeconomics Pertains to Chapter 21 Mankiw - Theory of Consumer Choice (Question not in the book, just as a reference I put this) 1) A Culinary Conundrum Assume that Georgetown University President John DeGioia is interested in encouraging healthier eating habits on the part of Georgetownstudents. Assume further that Georgetown Students have two options for their meals: they can eat in the cafeteria on campus or at one of the fancy restaurants in the surrounding neighborhood. Meals on campus are healthier than most off-campus options, so President DeGioia would like to encourage students to eat on campus more often. However, students think it’s fun to go off campus for their meals when they can afford to do so. Thus,you should consider on-campus meals to be inferior good standoff-campus meals to be normal goods. President DeGioia has four options:i) he could lower the price of on-campus meals without discouraging the GRA from offering a discount to Georgetown…
Problem 2: At the start of the COVID-19 pandemic, it was difficult to find supplies of standard household toilet paper in grocery stores. Using supply and demand analysis, speculate as to why? Problem 3: Consider an individual's demand curve for a specific good, given that person's preferences and income. That demand curve depicts how that individual's quantity demanded of a particular good (say boneless skinless chicken thighs) depends upon the price. Specifically, the individual's demand curve plots the answers to "what is the utility maximizing quantity of that specific good given the person's preferences and income for a specific price for that good, holding fixed the prices of all other goods?" A typical good is depicted on pages 21 and 24 of Notes N2. Page 21 shows how the utility- maximizing amount of beer varies with the price change by showing how the consumer maximizes their utility subject to the budget constraint (which varies with the price of beer). Page 24 summaries…
You have 6 hours to study for 2 exams tomorrow. The relationship between the time studying and test scores is shown below. Economics Hours Psychology Score 58 64 Score Hours 58 66 1 1 73 69 73 76 78 79 79 84 4 5. 88 9. 91 a. Use the rule for determining optimal purchases to decide how many hours you should study each subject Treat each point on an exam like 1 unit of utility and assume you are equally interested in doing well in economics and psychology. You should study economics for 6 hours and psychology for 5 hours.
a. Michelle has $7 to spend on makeup and clothes and wants to maximize her utility on her purchase. Based on the data in the table, how much makeup and clothes should Michelle purchase to maximize her utility. Show all working Quantity 1 2 2|3 456700 5 6 Makeup= $1 8 Total Utility 28 52 72 88 100 108 112 112 Clothes = $0.50 Quantity 1 2 3 4 5 6 7 8 Total Utility 12 22 30 36 40 42 42 40