40) After getting an A on your economics exam, you decide to…
40) After getting an A on your economics exam, you decide to go to your favorite Mexican restaurant to celebrate. You are having trouble deciding whether to order the chipotle chicken chimichanga or the cilantro seafood enchiladas. Use the rule of equal marginal utility per dollar to determine which one to purchase: (a) the chimichanga for $8 which gives you 120 units of utility, or (b) the enchiladas for $15 which gives you 195 units of utility? Assume your budget is large enough to purchase either item.
Read DetailsPrice per Bushel (dollars) Quantity Demanded (bushel…
Price per Bushel (dollars) Quantity Demanded (bushels) Quantity Supplied (bushels) $2 40,000 0 4 34,000 4,000 6 28,000 8,000 8 24,000 16,000 10 20,000 20,000 12 18,000 28,000 14 12,000 36,000 16 6,000 40,000 The table contains information about the corn market. Answer the following questions based on this table. 37) An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for corn at $12 per bushel. What is the amount of shortage or surplus in the corn market as a result of the price floor? If the government agrees to purchase any surplus output at $12, how much will it cost the government?
Read Details34) Suppose that in Germany, the opportunity cost of produci…
34) Suppose that in Germany, the opportunity cost of producing a gallon of beer is 5 gallons of wine. In Italy, the opportunity cost of producing a gallon of beer is 3 gallons of wine. What is the opportunity cost of producing a gallon of wine for Germany? What is the opportunity cost of producing a gallon of wine for Italy? Which country has a comparative advantage in the production of beer? Which country has a comparative advantage in the production of wine?
Read Details