Week 3, Assignment 1

Chapter 5, applied question 1. a)Brid break down is not devising the utility-maximizing choice because the MU (marginal utility) is not equal for the wine-coloured and cheese. She has 50 units of wine and 40 units of cheese. b) Brid earn is disbursement to a greater purpose money on the cheese and less on the wine so she need to even out these amounts. By purchasing 1 less bottle of wine she could get another(prenominal) 2.5 Ibs of cheese which would even out the units of utility. Chapter 6, Applied indecision 1 The publisher and the analyst confirm different points of enchant when it comes to intake elasticity. The publisher is looking at the amount of the papers and the metre effect that the raise in determine would have on the paper. With terms elasticity the augment in price go forth produce a decrease in revenue because it supply decrease the demand for the paper being more costly. This stance shows that people are more sensitive to high prices an d swallow up react strongly to a raise in price resulting in fewer sales. The analyst is looking at the dilate in revenue with the price emergence. The analyst believes that people fit not be as sensitive to the price increase and that people will continue to buy the paper so revenue will increase. Chapter 7, Applied Questions 1 a. Discuss the statistical importation of the parameter estimates a, b, c, and d, using the p- set.

Are the signs of b, c and d concordant with the theory of demand? With the theory of demand p-value is abetter _or_ abettor with b and if prices raise the amount sold drops. below the same theory, p-value is associate with c so that when more is customers have more money, more products! will be purchased. P-value is connected with d so when prices go up, less products will be sold. b. What is the estimated make sense 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 right essay, order it on our website: OrderEssay.net

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