Chapter 9: Answers to Questions and Problems
1.
a. D2.
b. D1.
c.
i. $20.
ii. 0 units.
iii. $20 to $50.
2.
a. Q1 =
a c1 1
100 12 1
Q2 =
Q2 = 22 0.5Q2 and
2b
2
2 (2)
2
a c2 1
100 20 1
Q1 =
Q1 = 20 0.5Q1 .
2b
2
2(2 )
2
b. Q1 = 16; Q2 = 12.
c. P = 100 2(2
Chapter 8: Answers to Questions and Problems
1.
a.
b.
c.
d.
e.
f.
g.
h.
7 units.
$28.
$224, since $32 x 7 = $224.
$98, since $14 x 7 = $98.
$126 (the difference between total cost and variable cost).
It is earning a loss of $28, since ($28 -$32) x 7 = - $
Chapter 3: Answers to Questions and Problems
1.
a. When P = $12, R = ($12)(1) = $12. When P = $10, R = ($10)(2) = $20. Thus, the
price decrease results in an $8 increase in total revenue, so demand is elastic over
this range of prices.
b. When P = $4, R =
Chapter 2: Answers to Questions and Problems
1.
a. Since X is a normal good, an increase in income will lead to an increase in the
demand for X (the demand curve for X will shift to the right).
b. Since Y is an inferior good, a decrease in income will lea
Chapter 1: Answers to Questions and Problems
1.
Consumer-consumer rivalry best illustrates this situation. Here, Levi Strauss & Co. is
a buyer competing against other bidders for the right to obtain the antique blue jeans.
2.
The maximum you would be will