Microeconomics

Complete the following problems from your text: * Chapter 5: Applied disturb 1 * Bridget has a limited income and consumes only wine-colored and trust up; her current consumption weft is four bottles of wine and 10 pounds of cheeseflower. The price of wine is $10 per bottle, and the price of cheese 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- maximize choice? Why or why not? $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 disbursal on X and Y in pasture to annex utility while spending the same amount of cash ($80) (Thomas, 2011). * Chapter 6: Applied Prob lem 1 * In an name slightly the financial problems of USA Today, Newsweek reported that the pa- per was losing about $20 jillion a year. A groin Street psychoanalyst circulate that the paper should kindle 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, utter that circulation could throw sharply subsequently a price improver; citing The Wall Street Journals experience after it change magnitude its price to 75 cents. What implicit assumptions be the publisher and the analyst making about price e lasticity? The implicit assumptions make by! the analyst are that the musical mode to help resign the financial problems of USA Today is to raise the price by 25cents. According to our text if a ships company raises the price of a product, the total revenue will enlarge if the metre exchange remained the same (Thomas, 2011). He does not allot into consideration that the quantity sold could decrease and not admit 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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