ECON 2106 HW2 Solutions

ECON 2106 HW2 Solutions - TRANDEL ECON 2106 HW #2 Answers...

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TRANDEL ECON 2106 HW #2 Answers (graphs were drawn in later) 1. a) Lily would buy two dresses and her consumer surplus would be $18 b) Lily would then buy 4 dresses and her consumer surplus would be $22. Lily would be better off if she joined the club. c) Lily should not join the club because her consumer surplus would be less than if she were not in the club. 2. Brian’s opportunity cost of going to see the thrashers would have been $25. Even though tickets only cost $12, Brian’s value of the concert was $25. 3. Watermelon Market P Q 4. French Fry Markets P Q 5. High-Fat Meat Market P Q 6. The most likely explanation is that price has decreased because of a decrease in demand for framing work. The market for housing right now is very slow and not as many houses are being built. Since these are two complementary goods, when the demand for one decreases, so does the demand for the other. Therefore a decrease in the building of houses would cause a decrease in the demand for
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framing wood. 7.
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ECON 2106 HW2 Solutions - TRANDEL ECON 2106 HW #2 Answers...

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