PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 3, Problem 7P
To determine
Relation between increasing insurance and automobiles.
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Ariya likes to play golf. The number of times per year that she plays depends on both the price of playing a round of golf as well as
Ariya's income and the cost of other types of entertainment-in particular, how much it costs to go see a movie instead of playing golf.
The three demand schedules in the table below show how many rounds of golf per year Ariya will demand at each price under three
different scenarios. In scenario D1, Ariya's income is $80,0o00 per year and movies cost $15 each. In scenario D2, Ariya's income is also
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Scenario
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D2
D3
Income per year
$80,000
$80.000
$100,000
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$15
$17
$17
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Quantity Demanded
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15
10
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30
$25
40
20
50
Instructions: Round your answers to two decimal places. If you are entering any negative numbers be sure to include a negative sign
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The table below shows two demand schedules for a given style of men’s shoe—that is, how many pairs per month will be demanded at various prices at a men’s clothing store in Seattle called Stromnord.
Price
D1 Quantity Demanded
D2 Quantity Demanded
$85
53
13
80
60
15
75
68
18
70
77
22
65
87
27
Suppose that Stromnord has exactly 70 pairs of this style of shoe in inventory at the start of the month of July and will not receive any more pairs of this style until at least August 1. Instructions: Enter your answers as whole numbers.a. If demand is D1, what is the lowest price that Stromnord can charge so that it will not run out of this model of shoe in the month of July?
What if demand is D2?
b. If the price of shoes is set at $85 for both July and August and demand will be D2 in July and D1 in August, how many pairs of shoes should Stromnord order if it wants to end the month of August with exactly zero pairs of shoes in its inventory?
What if the…
Earlier this year, 2021, the price of chicken meat rose unexpectedly reached to 250/ kilo at peak from the previous price of 170/ kilo. This 68% increase of price per kilo was primarily caused by excess demand for chicken meat. This is the result of the decrease in consumption for pork meat due to the threat of African Swine Flu (ASF). However, even though consumer shifted preferences, the increase in the price of chicken was perceived to be too high for the budget of consumers. Therefore, sellers realized decrease in their daily aggregate sales from 1,000 kilos to 700 kilos.
Illustrate the change in the market equilibrium through a graph.
What presumably happened to the total revenues of the sellers during the = price hike period?
Compute the price elasticity of demand.
Derive the total revenue before the hike (TR1), and after the hike (TR2).
Chapter 3 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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