Economics Discussion

Sigchi4life
Category:
Economics
Price: $20 USD

Question description

Screen Shot 2014-05-04 at 7.35.00 PM.png



 

Question:

Use the total utility (TU) data for individual X to calculate the value (number of utils of satisfaction) that X will get from her/his 7th hour of sleep and 8th hour of sleep.
The MU of X's 7th hour of sleep is ___ utils, and
the MU of X's 8th hour of sleep is ___ utils.
To answer, use whole numbers separated by a comma but no spaces. For example: 8,6

 

 

 

Question 2

 

Fill in the Blank

(1 points)

 

Question:

When X has only 12 hours per day to devote to sleep or leisure, the optimal hours per day of
sleep = __
leisure = __
Again, answer with two whole numbers separated only by a comma. link

 

 

 

Question 3

 

Fill in the Blank

(1 points)

 

Question:

When X has only 12 hours per day to devote to sleep or leisure, the maximum TU achievable is _____ utils.
[The answer is a whole number.]

 

 

 

Question 4

 

Fill in the Blank

(1 points)

 

Question:

Now, if X's other obligations decrease, leaving 14 hours per day to devote between sleep and leisure, the maximum utility can be attained when sleep and leisure are consumed in the following amounts:
Hours of sleep per day = ____
Hours of leisure per day = ____
[Again, answer with whole numbers separated only with a comma]

 

 

 

Question 5

 

Fill in the Blank

(1 points)

 

Question:

When X has 14 hours to devote to sleep and leisure, the maximum TU achievable is _____ utils.

 

 

 

Question 6

 

Fill in the Blank

(1 points)

 

Question:

The remaining questions on this quiz pertain to producer decision-making, but involve the same basic logic. The objective is to maximize total production (TP), (or "sales" in this example) -under a certain budget constraint. This time the constraint is financial, and the only two competing inputs that contribute to sales are television ads (input A) and radio ads (input B).
Notice that the data are the same as before, but go by different names. Instead of making decisions by way of comparing MU, you'll now make the same decisions by comparing MP: marginal product, or the number of additional lottery tickets sold as the result of airing one more ad each day. Use the data provided with the link below to answer the remaining questions.
Begin by assuming that the advertising budget is $6000 per day and that the cost of a TV ad = the cost of a radio ad = $500. Basically, this means that $6000 = [Q(TV ads) + Q(radio ads)]x $500, or dividing by 500,
12 =Q(TV ads) + Q(radio ads)
For those of you who prefer English, the total number of ads each day will be 12 (or less) if we stay within our budget.
Under these conditions, the optimal composition of ads will be:
___ TV ads each day and
___ Radio ads each day.
[Again, the answer should be expressed as two whole numbers separated only by a comma]
Link to file

 

 

 

Question 7

 

Fill in the Blank

(1 points)

 

Question:

Under the conditions laid out in question #6, sales of lottery tickets can total as high as _____ thousand tickets per day. [Note the similarity to question #3]

 

 

 

Question 8

 

Fill in the Blank

(1 points)

 

Question:

If the advertising budget now increases to $7000 with the two inputs to sales (radio and TV ads) remaining at $500 each, the optimal quantities of them would now be....
____ TV ads per day, and
____ Radio ads per day.
[Note the similarity to questions 4 and 5]

 

 

 

Question 9

 

Fill in the Blank

(1 points)

 

Question:

Now assume that the budget is back to only $6000 per day, but that the prices of the inputs (the two different types of ads) are no longer the same. Assume now that TV ads increase to $600 each, and that radio ads sell for only $300 each. Your logic now must take into account these different prices by comparing "bang for the buck", or MP per the price of each input.
The new optimal combination of TV ads to Radio ads for maximizing ticket sales under this budget constrant is:
____ TV ads per day, and
____ Radio ads per day.

 

 

 

Question 10

 

Multiple Choice

(1 points)

 

Question:

In comparing the optimal combination of inputs in question #6 with that of question #9 (that is, assuming a budget of $6000 and examining only the impact changing input prices had on optimal quantities of the inputs), what did the substitution effect predict?

 

 

 

fewer TV ads and fewer radio ads would be purchased
fewer TV ads and more radio ads would be purchased
more TV ads and fewer radio ads would be purchased
more TV ads and more radio ads would be purchased

Question 11

 

Multiple Choice

(1 points)

 

Question:

When the price of an input decreases, the real income effect predicts that....

 

 

 

more of all inputs (or normal goods) will be purchased
fewer of all inputs (or normal goods) will be purchased
more of the input that went down in price (but less of the other inputs) will be purchased
less of the input that went down in price, but more of other inputs) will be purchased


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