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- You are in the market for a new couch and havefound two advertisements for the kind of couchyou want to buy. One seller notes in her ad that sheis selling because she is moving to a smaller apartment, and the couch won’t fit in the new space.The other seller says he is selling because the couchdoesn’t match his other furniture. Which seller doyou expect to buy from? Why? ( Hint: Think whowould be the more motivated seller.)Stan Moneymaker needs 15 gallons of gasoline to top off his automobile’s gas tank. If he drives an extra eight miles (round trip) to a gas station on the outskirts of town, Stan can save $0.10 per gallon on the price of gasoline. Suppose gasoline costs $3.90 per gallon and Stan’s car gets 25 mpg for in-town driving. Should Stan make the trip to get less expensive gasoline? Each mile that Stan drives creates one pound of carbon dioxide. Each pound of CO2 has a cost impact of $0.02 on the environment. What other factors (cost and otherwise) should Stan consider in his decision making?Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either callher on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasolinemoney. He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses ahandy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values inTable 6.6, figure out the points on Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch)and identify his utility-maximizing point
- Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get Disceunted prie to some stores than others. For Marked p price example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $102 for the skirt: anita's office Original pre Travel Time Each Way Price of a Skirt (Dollars per skirt) Store Local Department Store (Minutes) 15 102 Across Town 30 85 Neighboring City 60 76 Juanita makes $42 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $42 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Complete the following table by computing the opportunity cost of…You must allocate the 70,000 seats in Reliant Stadium (in Houston) among Texan (Houston) and Cowboy (Dallas) fans for an upcoming game between the two footfall teams. You can set different prices for seats in the Dallas and Houston sections of the stadium. Suppose you can obtain $40/ticket from Houston fans irrespective of the number of seats you allocate to Houston fans. You must drop price in order to sell more tickets to Dallas fans, however. Let Q be the number of tickets you allocate to Dallas fans. Assume that the maximum price you can charge for these tickets is given by the following inverse demand function P= 80 500 (a) Express the total revenue (on all 70,000 seats) from ticket sales as a function of Q; (b) Derive the first-order condition of the revenue-maximizing problem (it's a function about Q); (c) What is the optimal number of seats allocated to Dallas fans?Kip is trying to decide whether to take a one-day martial arts class at Rex Kwan Do. The fee for the class is $400. Kip will also have to pay his brother Napoleon $150 for that day in return for giving him a ride into town. Instead of taking the class Kip could spend all day on the computer chatting with his girl, LaFawnduh. This gives him a value of $300. On the other hand, he could spend all day working with his Uncle Rico and making sweet moolah. Uncle Rico has promised to pay him $350 on that day if he works with him. What is Kip’s marginal cost of joining Rex Kwan Do? Group of answer choices $650 $550 $400 $300 $350 $150 $900
- Bluth’s Bananas is considering expanding its retail operations for its one-of-a-kind frozen banana stands on Jones Beach, which is 10 kilometers long. Bluth’s Bananas estimates that the typical day has 2,000 visitors to the beach, spread uniformly, and that each will demand a single frozen banana provided the price plus any disutility of traveling to a stand does not exceed $6. To visit a stand a beach goer incurs a disutility of $0.50 for each 1/4 kilometer they have to walk to reach a stand. Each Bluth Banana costs $0.75 to make and each stand requires an operating fee to be paid to the city of $50 per day. Determine the equilibrium number of stands Bluth’s Bananas should operate on the beach given it is not in competition with any other firm. Determine the profit maximizing price for the bananas and calculate the profit realized by BB in equilibrium.Suppose the National Football League (NFL) wants to make Super Bowl tickets affordable for more football fans. The league therefore sets the price of a Super Bowl ticket below what is generally considered a fair market price. Suppose the price of a ticket for a regular seat at the Super Bowl is set at just $500. People who have tickets, however, can turn resell them online for $2,500 each, or more. If there are no transaction costs associated with online sales of Super Bowl tickets, the true cost to a fan of attending the Super Bowl is: O at least $2,500. O the monetary price paid to obtain the ticket. at most $500. $2,000 less than the opportunity cost of a ticket.Donuts are a big thing in Portland, OR. You go into one of the many donut establishments to purchase some number of these tasty (and even vegan or gluten free if required) treats. Let's say that the first donut has higher utility for you, so you are willing to pay up to $2 for it. For the second donut you are willing to pay $1.50, the third $1, a fourth $0.50 and the fifth $0.00. This particular bakery in Portland charges an average of $1 per donut. If you are a rational buyer (which can be hard when faced with so many different delicious donuts) then how many donuts do you purchase, and how much consumer surplus (i.e., money saved compared to what you were willing to spend) do you have? O 4 donuts, $5 O 2 donuts, $5 O 3 donuts, $1.50 O 1 donut, $0.50
- Suppose the National Football League (NFL) wants to make Super Bowl tickets affordable for more football fans. The league therefore sets the price of a Super Bowl ticket below what is generally considered a fair market price. Suppose the price of a ticket for a regular seat at the Super Bowl is set at just $500. People who have tickets, however, can turn resell them online for $2,500 each, or more. If there are no transaction costs associated with online sales of Super Bowl tickets, the true cost to a fan of attending the Super Bowl is:Suppose that Ciana is deciding whether or not to buy a pair of sneakers that she has been researching online, and also the best place to make her purchase. Three different stores in the area sell the sneakers she likes, but some stores are more convenient for Ciana to reach than others. One option is her local shoe store located only 15 minutes away from where she works, where they charge a marked-up price of $124 for the sneakers: Store Travel Time Each Way Price of a Sneakers (Minutes) (Dollars per sneakers) Local Shoe Store 15 124 Different Neighborhood in Town 30 103 Rural Outlet 60 70 Ciana earns an hourly wage of $30 at her job. In order to purchase her sneakers she will have to take time off work, so each hour away from her job costs her $30 in lost income. Assume that Ciana’s travel time is the same each way (to and from the store) and that it will take her 30 minutes once she reaches a store to complete her shopping. Assume throughout the question…3.15 Mandy is ordering a set of football tickets for the coming season. She plans to sell the tickets to make some money. There are two types of tickets: tickets for road games and tickets for home games. For each road game ticket, she could make a profit of $150, and for each home game ticket, the profit is $50 on average. The ticket office offers two price options: (a) $5/home ticket, and no more than $50 purchase per person; $50/road ticket, and no more than $300 purchase per person. (b) $7.5/home ticket, and no more than S100 purchase per person; $45/road ticket, and no more than $250 purchase per person. How many tickets of each type should Mandy purchase so as to maximize the total profit she can make?