Principles of Microeconomics 7th Edition solutions

Principles of Microeconomics 7
.A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the mar-ginal cost of mining diamonds is constant at $1,000 per diamond and the demand for diamonds is described by the following schedule:PriceQuantity$8,000 5,000diamonds7,000

Principles of Microeconomics 7
The New York Times (Nov. 30, 1993) reported that the inability of OPEC to agree last week to cut production has sent the oil market into turmoil . . . [leading to] the lowest price for domestic crude oil since June 1990.a.Why were the members of OPEC trying to agree to cut production?b.Why do you sup

Principles of Microeconomics 7
This chapter discusses companies that are oligopolists in the market for the goods they sell. Many of the same ideas apply to companies that are oligopolists in the market for the inputs they buy.a.If sellers who are oligopolists try to increase the price of goods they sell, what is the goal of buyer

Principles of Microeconomics 7
Consider trade relations between the United States and Mexico. Assume that the leaders of the two coun-tries believe the payoffs to alternative trade policies are as follows:United States DecisionLowTariffsLow TariffsU.S. gains$25 billionMexico gains$25 billionMexico gains$10 billionMexico gains$30 b

Principles of Microeconomics 7
Synergy and Dynaco are the only two firms in a spe-cific high-tech industry. They face the following payoff matrix as they decide upon the size of their research budget:Synergys DecisionLargeBudgetLarge BudgetSynergy gains$20 millionDynaco gains$30 millionDynaco gains$70 millionDynaco gainszeroDynaco

Principles of Microeconomics 7
You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation:If both of you work hard, you both get an A, which gives each of you 40 units of happiness. If onl

Principles of Microeconomics 7
A case study in the chapter describes a phone conversation between the presidents of American Airlines and Braniff Airways. Lets analyze the game between the two companies. Suppose that each company can charge either a high price for tickets or a low price. If one company charges $300, it earns

Principles of Microeconomics 7
Two athletes of equal ability are competing for a prize of $10,000. Each is deciding whether to take a danger-ous performance-enhancing drug. If one athlete takes the drug, and the other does not, the one who takes the drug wins the prize. If both or neither take the drug, they tie and split the priz

Principles of Microeconomics 7
Little Kona is a small coffee company that is consider-ing entering a market dominated by Big Brew. Each companys profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price: a.Does either player in this game have a dominant strategy?b.Does your answer to part (