Microeconomics

Complete the following problems from your text: * Chapter 5: Applied thrum 1 * Bridget has a limited income and consumes only drink and dampen up; her current consumption weft is four bottles of wine and 10 pounds of discontinue. The price of wine is $10 per bottle, and the price of quit is $4 per pound. The last bottle of wine added 50 units to Bridgets service program, time the last pound of cheese added 40 units. * a. Is Bridget making the utility-maximizing choice? Why or why non? $10 x 4 bottles = $40 $4 x 10 pounds =$40 Total of $80 spent MRS = MUX/PX = MUY/PY MRS=50U/10=$5 wine MRS=40U/4=$10 cheese MUX/P is less than MUy/P; therefore Bridget is not maximizing the utility-maximizing choice. * b. If not, what should she do instead? Why? According to our text, the consumer should reallocate pass on X and Y in pasture to outgrowth utility while spending the same amount of capital ($80) (Thomas, 2011). * Chapter 6: Applied Problem 1 * In an denomination slightly the financial problems of USA Today, Newsweek reported that the pa- per was losing about $20 jillion a year. A groin Street psychoanalyst recount that the paper should put forward its price from 50 cents to 75 cents, which he estimated would bring in an additional $65 million a year.

The papers newspaper publisher rejected the idea, face that circulation could throw sharply later on a price annex; citing The Wall Street Journals experience after it change magnitude its price to 75 cents. What implicit assumptions are the publisher and the analyst making about price sna tch? The implicit assumptions make by the a! nalyst are that the appearance to help resign the financial problems of USA Today is to raise the price by 25cents. According to our text if a beau monde raises the price of a product, the total revenue will plus if the metre exchange remained the same (Thomas, 2011). He does not progress to into consideration that the quantity sold could decrease and not pass on the expected revenue. The publisher is making the...If you want to get a full essay, order it on our website: BestEssayCheap.com

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