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Unformatted text preview: eating French pastries. The total satisfaction she receives from eating pastries is listed below along with the marginal satisfaction she receives from each additional pastry consumed: Num of pastry consumed Total Satisfaction (Cumulative) Marginal Satisfaction 1 5 2 7 3 9 4 10 5 9 6 5 7 -3 (a) How many pastries should the consumer eat if they are free? (b) If the price of French pastries is 3 (in unites measured the same way as satisfaction). How many pastries should the consumer eat now? 4. Let the demand curve be Q=a-bP, where a and b are positive constants. (a) What is the price elasticity at Q=0? (b) What is the price elasticity at P=0? (c) What is the price elasticity at P=a/2b? (d) What is the slope of demand at each of these points? (e) What can you say about elasticity along this curve? What can you say about the slope of this curve? 5. Distinguish between positive and normative economics, giving an example of each type of analysis....
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This note was uploaded on 09/14/2008 for the course PAM 2000 taught by Professor Evans,t. during the Fall '07 term at Cornell University (Engineering School).
- Fall '07