Fill a form in 3 easy steps - less than 5 mins.
Posted: February 26th, 2022
Intro Micro Your Name(s):__________________________________________
Professor Kane
Problem Set 1
For graphs, it is often best to use Excel or draw your graph and print the picture
Total 15 points.
1. (5 points) Made the right way duck a l’orange is the most delicious thing ever. Your friend Beyoncé has abandoned her music career to open an Tab Cat Bistro, which specializes in French cuisine. She has done some market research and finds that your neighbors value duck according to the following schedule:
serving
MU Duck
1
$45.00
2
$42.75
3
$40.61
4
$38.58
5
$36.65
6
$34.82
7
$33.08
8
$31.43
9
$29.85
10
$28.36
Image result for Beyoncé cooking
https://www.phaidon.com/resource/duck-a-lorange.jpg
a. (2 points) Graph the demand curve for duck. Does the demand curve have a positive or negative slope? Why?
b. (2 points) How many servings will Beyoncé sell at $38.58? How many at $40.61? At $29.85?
c. (1 point) What will happen to the demand curve if a new study comes out showing duck increases the risk of heart disease? What will happen to the demand curve if instead a study comes out showing they reduce the risk of dementia?
2. (5 points) Production. Beyoncé uses equipment that she rents for $1000 and ingredients that cost $9.95 a serving for the first 6 servings; for additional servings, she can buy the ingredients at a discount for $8.95. (She does any discount on the first five servings!) (Note that she signed a lease and pays the rent regardless of how many dinners she serves; note that regardless of how much ingredients she buys for additional servings, she pays $9.95 for the ingredients for the first 6.) She hires workers at $13 each and finds that they produce servings according to the following schedule:
A picture containing food Description automatically generated
Servings
Total Worker Hours
1
0.75
2
1.58
3
2.48
4
3.48
5
4.58
6
5.79
7
7.12
8
8.58
9
10.18
10
11.95
a. (1 point) Calculate and graph the additional worker hours needed for each serving. (Use a spreadsheet!) What is happening to the marginal productivity of labor as more is produced and more workers are hired?
b. (2 points) Calculate and and graph the marginal cost of each serving. (Use a spreadsheet and show your calculations!) Why does the MC curve have the slope (up, down, or flat) that it does? What happens to the slope of the MC curve as Beyonce produces more and more servings? Why?
c. (2 points) Calculate and graph the marginal cost of each serving if workers get a raise to $16.25/hour, with the old productivity. What happens if they also become more productive so each serving can be made with only 80% as much labor. Show your calculations! Compare the results of high wages and high productivity with the initial situation. Which would you prefer as an employer? Which would you prefer as worker? Which is better for society?
3. (5 points) Perfect competition and equilibrium.
a. (1 point) Put the demand and supply curves together (at the original productivity and wages). Beyoncé is a musician and never took Economics so she naively assumes that she is in a perfectly competitive market. How many servings will she sell? At what price?
b. (2 points) Draw the graph again and shade in the entire area of consumer surplus. Shade in the entire area of producer surplus.
c. (2 points) Calculate consumer surplus as the sum of the difference between the marginal utility and the price for each serving up to the last sold. Calculate producer surplus as the sum of the difference between price and marginal cost for each serving. What is the dollar value of consumer surplus? What is the dollar value of the producer surplus? What is the dollar value of the total social surplus?
2
You Want Quality and That’s What We Deliver
Our writing team is assembled through a rigorous selection process, where we handpick accomplished writers with specialized expertise in distinct subject areas and a proven track record in academic writing. Each writer brings a unique blend of knowledge and skills to the table, ensuring that our content is not only informative but also engaging and accessible to a general college student audience
Competitive pricing is a cornerstone of our service, where we balance affordability with exceptional quality. In offering the best writers at rates that rival other writing services, we ensure that students can access top-notch content without breaking the bank unnecessarily. Our fair and transparent pricing structure is designed to provide value for money, making us a go-to choice for students seeking high-quality writing services at an affordable price.
Academic integrity is paramount to our writing service, which is why we produce original research and writing content for every paper. Each piece of work is carefully written from scratch, ensuring that every sentence, paragraph, and page is authentic and free from plagiarism. Our rigorous quality control process involves thorough scanning of every final draft, guaranteeing that the content meets the highest standards of originality and academic integrity. With keen attention to citation and referencing, we ensure that every source is properly credited, giving you complete peace of mind. We also have the best plagiarism checkers like safeassign and turnitin thus providing similarity score for each paper.
When you decide to place an order with Dissertation Help, here is what happens: