Principles of Microeconomics 7th Edition solutions

Principles of Microeconomics 7
Ball Bearings, Inc. faces costs of production as follows: a. Calculate the company's average fixed costs, average variable costs, average total costs, and marginal costs at each level of production. b. The price of a case of ball bearings is $50. Seeing that he can't make a profit, the ch

Principles of Microeconomics 7
The market for apple pies in the city of Ectenia is com-petitive and has the following demand schedule:Price Quantity Demanded$11,200 pies21,10031,000490058006700760085009400103001120012100130Each producer in the market has fixed costs of $9 and the following marginal cost:Quantity

Principles of Microeconomics 7
A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O Soup for $1.50 per meal. Her weekly food budget is $60.a.Draw the budget constraint showing the trade-off between dining hall meals and Cups O Soup. Assuming that she spends equal amounts on both

Principles of Microeconomics 7
The market for pizza has the following demand and supply schedules: Price Quantity Demanded Quantity Supplied $4 135 pizzas 26 pizzas 5 104 53 6 81 81 7 68 98 8 53 110 9 39 121 a.Graph the demand and supply curves. What is the equilibrium price and quantity in this market? b.If the actual pri

Principles of Microeconomics 7
The residents of the town Ectenia all love econom-ics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits: QD= 10 P, where P is the price of admission.a

Principles of Microeconomics 7
3.John has been working as a tutor for $300 a semester. When the university raises the price it pays tutors to $400, Emily enters the market and begins tutoring as well. How much does producer surplus rise as a result of this price increase?a.by less than $100b.between $100 and $200c.between $200 and

Principles of Microeconomics 7
Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows: Price Quantity Demanded Quantity Supplied $4 10,000 tickets 8,000 tickets 8 8,000 8,000 12 6,000 8,000 16 4,000 8,000 20 2,000 8,000 a.

Principles of Microeconomics 7
Five consumers have the following marginal utility of apples and pears:Marginal Utility of ApplesMarginal Utility of PearsClaire612Phil66Haley63alex36Luke312 The price of an apple is $1, and the price of a pear is $2. Which, if any, of these consumers are optimizing over their choice of fruit? For

Principles of Microeconomics 7
An industry currently has 100 firms, each of which has fixed costs of $16 and average variable costs as follows:Quantity Average Variable Cost1$12233445566a.Compute a firms marginal cost and average total cost for each quantity from 1 to 6.b.The equilibrium price is currently $10. How much do

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
Janes Juice Bar has the following cost schedules:Quantity Variable Cost Total Cost0 vats of juice $ 0 $ 30110402255534575470 1005100 1306135 165a.Calculate average variable cost, average total cost, and marginal cost

Principles of Microeconomics 7
An economy consists of three workers: Larry, Moe, and Curly. Each works 10 hours a day and can produce two services: mowing lawns and washing cars. In an hour, Larry can either mow one lawn or wash one car; Moe can either mow one lawn or wash two cars; and Curly can either mow two lawns or wash one c

Principles of Microeconomics 7
The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses.a.How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer?b.Draw two graphs, si

Principles of Microeconomics 7
A friend of yours is considering two cell phone service providers. Provider A charges $120 per month for the service regardless of the number of phone calls made. Provider B does not have a fixed service fee but instead charges $1 per minute for calls. Your friends monthly demand for minutes of calli

Principles of Microeconomics 7
Melissa buys an iPhone for $120 and gets consumer surplus of $80.a.What is her willingness to pay?b.If she had bought the iPhone on sale for $90, what would her consumer surplus have been?c.If the price of an iPhone were $250, what would her consumer surplus have been?

Principles of Microeconomics 7
China is a major producer of grains, such as wheat, corn, and rice. In 2008, the Chinese government, concerned that grain exports were driving up food prices for domestic consumers, imposed a tax on grain exports.a.Draw the graph that describes the market for grain in an exporting country. Use this g

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
Maria has decided always to spend one-third of her income on clothing. a.What is her income elasticity of clothing demand? b.What is her price elasticity of clothing demand?c.If Marias tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change?

Principles of Microeconomics 7
The many identical residents of Whoville love drink-ing Zlurp. Each resident has the following willingness to pay for the tasty refreshment:First bottle$5Second bottle 4third bottle3Fourth bottle2Fifth bottle1Further bottles 0a.The cost of producing Zlurp is $1.50, and the

Principles of Microeconomics 7
Cups of coffee and donuts are complements. Both have inelastic demand. A hurricane destroys half the coffee bean crop. Use appropriately labeled diagrams to answer the following questions.a.What happens to the price of coffee beans?b.What happens to the price of a cup of coffee? What happens to tota