will then be able to undertake a detailed study of the implications of this simple mode of consumer behaviour. The Budget Constraint Suppose that there is some set of goods from which the consumer can choose. In real life there are many goods to consume but we will consider two. Let the consumer’s consumption bundle be where ‚ represents the number of units the consumer chooses of good 1 and is the number of units of good to be chosen by the consumer. Let and represent the unit prices for
Premium Consumer theory Preference
EconS452 15 Problems*30 points each = 450 points Score based on 400 points Midterm 10/25/2012 Name:___________________________ 1. Zelda Manufacturing has a rather unique product that sells for $15 per unit‚ and the marginal cost is $7.50. Determine the Lerner index for Zelda Manufacturing. Does this index indicate market power? Using the SCP paradigm‚ what might the conduct of Zelda indicate about the structure of the industry? The Lerner index is (P - MC)/P = (15 - 7.5)/15 = .50. Since the Lerner
Premium Supply and demand Marginal cost Costs
frictional unemployment. Frictional unemployment can be mainly explained by reasons based on inconsistent information. First‚ businesses intermittently try and balance their resources and with miscalculation and changes in demand they will increase or decrease the amount of employees they have. Also‚ people in-between jobs may not have enough information to find and select the right job. A classical economist would also describe voluntary unemployment. This type of unemployment occurs with the refusal
Premium Keynesian economics Unemployment Inflation
among the youth? 2. What are the possible connections between low food accessibility and poor diets in low-income communities? Results: The results may lead to a decline in poor diets and in low-income communities. The results may lead to a decrease in obesity among the youth. Background: Community “Food Desert”‚ is a term that has been coined by the U.S. Department of Agriculture to signify thousands of communities across the America where residents continue to live in low-income‚ low-access
Premium
(4) g)[pic] (3) 4) a) Given the Marginal Propensity to save‚ [pic] find out the Saving and consumption functions‚ where S=0 when income is 81. (Income =y) (2) b) What is the present value of the income stream generating 3000 taka a year with a discount rate of 6% for 2 years. What is the value of a perpetuity with such characteristics? (2) c) Under a Monopoly‚ the demand function is [pic] and Marginal Cost function is [pic]. Find out the Consumer
Premium Supply and demand Derivative Microeconomics
ONSUMER EQUILIBRIUM CARDINAL AND ORDINAL UNIT 5 CONSUMER EQUILIBRIUM: CARDINAL AND ORDINAL APPROACHES Structure 5.0 Objectives 5.1 Introduction 5.2 Cardinal utility approach to consumer behaviour 5.3 The law of eventual diminishing marginal utility 5.4 Consumer’s equilibrium 5.5 Basis of law of demand in the cardinal approach 5.6 Consumer’s surplus 5.7 The ordinal utility approach to consumer behaviour: the indifference curve approach 5.8 Consumer’s budget constraint 5.9 Consumer’s
Premium Consumer theory Supply and demand
Managerial Economics B Ad 5102 Study Guide for Mid-Term Exam DO PRACTICE QUIZZES‚ STUDY GUIDE QUESTIONS‚ PROD EX‚ TEST BANK You may construct a “formula sheet” that has only expressions‚ no words‚ except those words that identify the formula or use a sheet that is a legacy of previous classes. Your own personal sheet will need to be inspected by me upon completion of the test. The test will cover Chapters 1-3 and 5. You will respond to five (5) of six (6) identification questions
Premium Supply and demand
Question 1 1 out of 1 points According to the graph below‚ if a country is currently producing at point X‚ the opportunity cost of producing another consumer good is Selected Answer: 20 capital goods Answers: 20 capital goods More than 20 capital goods Fewer than 20 capital goods 20 consumer goods Fewer than 20 consumer goods Question 2 1 out of 1 points The basic economic problem of all countries is the existence of Selected
Premium Supply and demand Consumer theory
1.5 Law of Demand 1.6 Demand Schedule 1.7 Demand Curve 1.8 Shift of Demand Curve v/s Movement along the demand curve 1.9 Effect of a Price Change 1.10 Elasticities of Demand 1.10.1 The Price Elasticity of Demand 1.10.1.1 The relationship between marginal revenue and price elasticity 1.10.1.2 Determinants of Price Elasticity of Demand 1.10.1.3 Price elasticity and Decision Making 1.11 Classification of Goods 1.12 Exceptions to the Law of Demand – Upward Sloping Demand Curve
Premium Supply and demand Consumer theory
CONSUMER CHOICE 5.0: Introduction In this unit‚ we shall concentrates on a consumer by looking at the behaviour of a consumer in exclusion from both other consumers and producers. Recall that a consumer is one who uses goods and services to satisfy her wants. She is assumed to be rational meaning that he aims at utility maximization; given her income and commodity prices. There are several theories that have been developed to try and explain the behaviour of a consumer. However‚ they can be
Premium Consumer theory Utility Preference