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1001majorch6

# 1001majorch6 - ECON1001AB Dr.KafuWONG KKL925,K812,KKL106...

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ECON 1001 AB Introduction to Economics I Dr. Ka-fu WONG Sixth week  of tutorial sessions KKL 925, K812, KKL 106 Clifford CHAN KKL 1109 [email protected]

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Covered and to be covered Covered the week before the break Dr. Wong finished up to kf006.ppt You should have at least read up to Chapter 6 Perfectly competitive supply: The cost side of the market If not, please press hard on it. Start reading Chapter 7 To be covered in the tutorial sessions this week Problems in chapter 6: #1, #3, #5, #7 and #9 You are advised to work on the even ones as well
Problem #1, Chapter 6 (1) Zoe is trying to decide how to divide her time between her job as a wedding photography, which pays \$27 per hours for as many hours as she chooses to work, and as a fossil collector, in which her pay depends both on the price of fossils and the number of them she finds. Earnings aside, Zoe is indifferent between the two tasks, and the number of fossils she can find depends on the number of hours a day she researches, as shown in the table below.

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Problem #1, Chapter 6 (2) Hours per day Total fossils per day 1 5 2 9 3 12 4 14 5 15
Solution to Problem #1 (1) Derive a table with a price in dollar increments from \$0 to \$30 in the first column and the quantity of fossils Zoe is willing to supply per day at that price in the second column

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Solution to Problem #1 (2) In the first hour, Zoe can collect 5 fossils If the price of a fossil is \$5, Zoe can make a total \$25 in an hour if she devotes all her time to collecting fossils, which is less than the money she can earn from photography Thus, she won’t collect fossil if the price of a fossil is less than \$5 If the price of a fossil is \$6 Zoe should devote all her time to photography, as she can make \$30 an hour from photography
Solution to Problem #1 (3) An additional hour would yield only 4 additional fossils or \$24 additional revenue, so she should not spend any further time looking for fossils

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