Microeconomics Opportunity Cost
Use this information to answer the following 4 questions: Marie has a weekly budget of $24, which she likes to spend on magazines and pies.
1. If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?
2. If the price of a pie is $12, what is the maximum number of pies she could buy in a week?
3. Draw Marie’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?
4. What is Marie’s opportunity cost of purchasing a pie?
Homework Answers
1. Give the three reasons that explain why the division of labor increases an economy’s level...
1. Give the three reasons that explain why the division of labor increases an economy’s level of production. 2. What are three reasons to study economics? 3. Suppose you have a team of two workers: one is a baker and one is a chef. Explain why the kitchen can produce more meals in a given period of time if each worker specializes in what they do best than if each worker tries to do everything from appetizer to dessert. 4....
1. Give the three reasons that explain why the division of labor increases an economy’s level...
1. Give the three reasons that explain why the division of labor increases an economy’s level of production. 2. What are three reasons to study economics? 3. Suppose you have a team of two workers: one is a baker and one is a chef. Explain why the kitchen can produce more meals in a given period of time if each worker specializes in what they do best than if each worker tries to do everything from appetizer to dessert. 4....
1. Armand has a weekly budget of $40 which he can spend on magazines and pies....
1. Armand has a weekly budget of $40 which he can spend on magazines and pies. Magazines cost $10 each and a pie is $5. Indicate the opportunity set on (a) Draw Armand's budget constraint on the graph provided. the graph. Magazines Pies (6) Determine if each of the following combinations are in Armand's opportunity set or not. i. Two magazines and four pies ii. One magazines and five pies iii. Three magazines and three ples (c) What is the...
Question #1: Budget Constraint [18 Points) Suppose that Tiffany has an income of $20 per week...
Question #1: Budget Constraint [18 Points) Suppose that Tiffany has an income of $20 per week and she spends it on frozen pizza (P) and beer (B). The price of a bottle of beer (Pg) is $1 and the price of frozen pizza (P) is $5 per pizza. (a) Derive an equation for the budget constraint. [4 Points] (b) Draw the budget constraint with beer on the horizontal axis and pizza on the vertical axis. Clearly indicate the x and...
1) Noah likes hot dogs and Coca-Cola. Hot dogs cost $1 each and Cokes cost $.50...
1) Noah likes hot dogs and Coca-Cola. Hot dogs cost $1 each and Cokes cost $.50 per bottle There is a special promotion for Coke that will last for one month. If Noah sends in the bottle tops from the Cokes he drinks during the next month, he will get a refund of $.20 for every bottlecap beyond the first 12 that he returns. For example, if he returns 25 bottle caps he will get back $2.60 $.20(25 12). Noah...
I am trying to understand this material how can i go about solving #4 3. (8...
I am trying to understand this material how can i go about solving
#4
3. (8 points total) Suppose a firm has the following benefit and cost structure: B(Q) 140Q 302 C(Q) 0.50 a. Find the MB(Q) and MC(Q) functions. b. What value of Q maximizes the Net Benefit NB(Q) B(Q)-C(Q)? 4. (50 points total) Abby is a first grader who likes to drink milk and juice. Suppose her parents give her $12 a week in pocket money to spend...
4. Suppose a consumer has a budget of S500 to spend on goods X and Z...
4. Suppose a consumer has a budget of S500 to spend on goods X and Z that have prices p, =5 and pz =10. a. Write the equation for the budget constraint. b. Draw the budget line, placing good X on the horizontal axis and Z on the vertical axis. c. What is the slope of the budget constraint line?
Quick intuition check via True or False Questions 1. 2. If all prices double and income...
Quick intuition check via True or False Questions 1. 2. If all prices double and income triples, then the budget line will become steeper There are two goods. You know how much of good 1 a consumer can afford if she spends all of her income on good 1. If you knew the ratio of the prices of the two goods, then you could draw the consumer's budget line without any more information. lf good l is on the horizontal...
ASAP Alan likes to eat pizza while drinking a can of beer. He has a weekly...
ASAP
Alan likes to eat pizza while drinking a can of beer. He has a weekly gourmet budget of $72. In the diagram below, pizza is on the horizontal axis and beer is on the vertical axis. The intercepts are 8 cans on the beer axis and 6 slices on the pizza axis. Alan has also been observed to buy 3 slices of pizza and 4 cans of beer Budget Line 10+ 00 beer (can) 6+ 4+ N H wt...
Suppose Andrea has preferences over consumption (C) and leisure (l). Suppose also her time constraint is...
Suppose Andrea has preferences over consumption (C) and leisure (l). Suppose also her time constraint is such that l + h = h¯, where h is the number of hours worked and h¯ is the time available. Suppose also h¯ = 8. If she works she receives an hourly wage (?) of 10. (a) (5 points) Suppose first her income depends only on the number of hours worked. Write and plot her budget constraint. What is the slope of her...
1. Armand has a weekly budget of $40 which he can spend on magazines and pies. Magazines cost $10 each and a pie is $5. Indicate the opportunity set on (a) Draw Armand's budget constraint on the graph provided. the graph. Magazines Pies (6) Determine if each of the following combinations are in Armand's opportunity set or not. i. Two magazines and four pies ii. One magazines and five pies iii. Three magazines and three ples (c) What is the...
Question #1: Budget Constraint [18 Points) Suppose that Tiffany has an income of $20 per week and she spends it on frozen pizza (P) and beer (B). The price of a bottle of beer (Pg) is $1 and the price of frozen pizza (P) is $5 per pizza. (a) Derive an equation for the budget constraint. [4 Points] (b) Draw the budget constraint with beer on the horizontal axis and pizza on the vertical axis. Clearly indicate the x and...
1) Noah likes hot dogs and Coca-Cola. Hot dogs cost $1 each and Cokes cost $.50 per bottle There is a special promotion for Coke that will last for one month. If Noah sends in the bottle tops from the Cokes he drinks during the next month, he will get a refund of $.20 for every bottlecap beyond the first 12 that he returns. For example, if he returns 25 bottle caps he will get back $2.60 $.20(25 12). Noah...
I am trying to understand this material how can i go about solving
#4
3. (8 points total) Suppose a firm has the following benefit and cost structure: B(Q) 140Q 302 C(Q) 0.50 a. Find the MB(Q) and MC(Q) functions. b. What value of Q maximizes the Net Benefit NB(Q) B(Q)-C(Q)? 4. (50 points total) Abby is a first grader who likes to drink milk and juice. Suppose her parents give her $12 a week in pocket money to spend...
4. Suppose a consumer has a budget of S500 to spend on goods X and Z that have prices p, =5 and pz =10. a. Write the equation for the budget constraint. b. Draw the budget line, placing good X on the horizontal axis and Z on the vertical axis. c. What is the slope of the budget constraint line?
Quick intuition check via True or False Questions 1. 2. If all prices double and income triples, then the budget line will become steeper There are two goods. You know how much of good 1 a consumer can afford if she spends all of her income on good 1. If you knew the ratio of the prices of the two goods, then you could draw the consumer's budget line without any more information. lf good l is on the horizontal...
ASAP
Alan likes to eat pizza while drinking a can of beer. He has a weekly gourmet budget of $72. In the diagram below, pizza is on the horizontal axis and beer is on the vertical axis. The intercepts are 8 cans on the beer axis and 6 slices on the pizza axis. Alan has also been observed to buy 3 slices of pizza and 4 cans of beer Budget Line 10+ 00 beer (can) 6+ 4+ N H wt...
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