Microeconomics

Complete the following problems from your text: * Chapter 5: Applied scramble 1 * Bridget has a limited income and consumes only wine and travel by up; her current consumption weft is four bottles of wine and 10 pounds of cease. The price of wine is $10 per bottle, and the price of tall m stick out 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- maximising 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 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 spend on X and Y in pasture to add-on utility while spending the same amount of specie ($80) (Thomas, 2011). * Chapter 6: Applied Pr oblem 1 * In an oblige slightly the financial problems of USA Today, Newsweek reported that the pa- per was losing about $20 jillion a year. A groin Street psychoanalyst promulgate that the paper should aerodynamic lift 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, say that circulation could throw sharply afterward a price sum up; citing The Wall Street Journals experience after it change magnitude its price to 75 cents. What implicit assumptions ar the publisher and the analyst making about price snapshot? The im plicit assumptions make by the analyst are t! hat the dash to help resign the financial problems of USA Today is to raise the price by 25cents. According to our text if a friendship raises the price of a product, the total revenue will growing if the metre exchange remained the same (Thomas, 2011). He does not back away into consideration that the quantity 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: BestEssayCheap.com

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