Respond to Short Answer and Numerical Questions

Questions

CHAPTER 5

1. (1.4 points) Use the information in the table to answer parts A, B, C, and D below. Suppose that shredders and thrashers have the following demand for helmets.Demand tablePrice per helmetQuantity Demanded for shredders
   (in helmets)Quantity Demanded for thrashers
   (in helmets)$20.00304$22.00293$24.00282$26.00271
   1. Using the midpoint method, calculate the price elasticity of demand as the price per helmet increases from $24.00 to $26.00 for shredders. (Note, for partial credit, show your work.)
   2. Classify the elasticity of demand from $24.00 to $26.00 for shredders as elastic, inelastic, or unit elastic.
   3. Using the midpoint method, calculate the price elasticity of demand as the price per helmet increases from $24.00 to $26.00 for thrashers. (Note, for partial credit, show your work.)
   4. Classify the elasticity of demand from $24.00 to $26.00 for thrashers as elastic, inelastic, or unit elastic.
2. (0.15 points) Graphically, what does the supply curve look like when supply is perfectly elastic?
3. (0.15 points) Graphically, what does the demand curve look like when demand is perfectly inelastic?
4. (0.15 points) Graphically, what does the supply curve look like when supply has constant unitary elasticity?
5. (0.15 points) Graphically, what does the demand curve look like when demand has constant unitary elasticity?
6. (0.5 points) Suppose a commercial bakery knows that if it raises the price for bread slightly, it will face a disproportionately large reduction in quantity demanded as a result. What effect will raising the price for the bread have on the manufacturer’s total revenue? Why?
7. (0.25 points) Imagine a new federal government policy requiring that aluminum can manufacturers advertise new methods for recycling that add a small cost of $0.05 per can manufactured. Now suppose the manufacturers want to pass the entire $0.05 added cost on to consumers. What market conditions would allow the manufacturers to do so?
8. (0.5 points) According to our textbook, the wage elasticity of labor supply for teenage workers is relatively elastic. Do you agree with that claim? Briefly explain why or why not.

CHAPTER 6

1. (1.25 points) Use the existing values in the table below to fill in the blanks A through E in total and marginal utility for cartons of tofu. Total and marginal utilityCartons of tofu (Quantity)Total UtilityMarginal Utility1500500298048031420A4B360520602806C2007D11082370E
   1. _____
   2. _____
   3. _____
   4. _____
   5. _____
2. (1.75 points) In the following scenario, basketballs cost $25.00 and golf balls cost $5.00. The buyer has $130 to spend on these items. (Note: in the original published version of Assignment 3, I made an error in column 6 of the table, the Total Utility column for golf balls. I edited the table to correct my mistake. If you submit your work based on the older version of this question, it will impact your answer for part B. When I grade Assignment 3, I will accept either answer as correct, to make it so that my mistake does not impact anyone’s grade.) Utility for two goodsBasketballs (Quantity)Total UtilityMarginal UtilityMarginal Utility per DollarGolf Balls (Quantity)Total UtilityMarginal UtilityMarginal Utility per Dollar18080 14242 215575 27836 322570 310830 428560 413224 533550 515018 636530 616212 737510 71686
   Using the information above, complete the following prompts.
   1. Fill in the marginal utility per dollar for basketballs and golf balls. (Note, don’t forget to divide by the cost of each item, which is given above. If needed, round your answers to two decimal places.)

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