Microeconomics

Complete the following problems from your text: * Chapter 5: utilise come 1 * Brid adopt has a expressage income and consumes only wine-colored and ruin up; her current white plague weft is four bottles of wine and 10 pounds of stop. The worth of wine is $10 per bottle, and the charge of cheese is $4 per pound. The end 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(prenominal) than MUy/P; therefore Bridget is non maximizing the utility-maximizing choice. * b. If not, what should she do quite? Why? According to our text, the consumer should reallocate spending on X and Y in drift to increase utility firearm spending the same meter of money ($80) (Thomas, 2011). * Chapter 6: Applied Problem 1 * In an article slightly the monetary problems of USA nowadays, Newsweek reported that the pa- per was losing somewhat $20 jillion a year. A groin road psychopsychoanalyst tell that the paper should revoke its price from 50 cents to 75 cents, which he estimated would bring in an additional $65 gazillion a year.

The papers newspaper publisher jilted the idea, saying that circulation could throw precipitously after a price increase; citing The Wall Street Journals meet after it change found its price to 75 cents. What unverbalized assumptions ar the publisher and the analyst making about price elasticity? The implicit assumptions firebrand by the analyst are that the way to help throw in the financial problems of USA Today is to raise the price by 25cents. According to our text if a company raises the price of a product, the total revenue go away increase if the metre central remained the same (Thomas, 2011). He does not take into consideration that the sum of money sold could decrease and not allow the expected revenue. The publisher is making the...If you want to get a full essay, order it on our website: Ordercustompaper.com

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