1.Jaynet spends $30,000 per year on painting supplies and storages pace. She
recently received two job offers from a famous marketing firm—one offer was for $110,000 per year, and the other was for $80,000. However, she turned both jobs down to continue a painting career. If Jaynet sells 25 paintings per year at a price of $8,000 each:
a. What are her accounting profits?
b. What are her economic profits?
2.The demand for good X is given by
Qdx = 6,000-1/2Px-Py+9Pz+1/10M
Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M=$70,000. a) Indicate whether goods Y and Z are substitutes or complements for good X. If raise to $7,000,
goes down, so X and Y are complements.
If raise to $150,
goes up, so X and Z are substitutes.
b) Is X an inferior or a normal good?
If income raise to $80,000
goes up, so X is a normal good.
c) How many units of good X will be purchased when Px = $5,230? =*5,230-6,500+9*100+*70,000=4,785
d) Determine the demand function and inverse demand function for good X.
Graph the demand curve for good X. For the given income and the price of goods, the demand function for good X is -6,500+9*100+*70,000, which simplifies to, to find the inverse demand equation, solve for price to obtain , then we can get two point in the curve they are (0, 7,400) and (14,800, 0).
3.Suppose demand and supply are given by
Qdx=14-1/2Px and Qsx=1/4Px-1
a) Determine the equilibrium price and quantity. Show the equilibrium graphically. The equilibrium price is $20 and equilibrium quantity is 4
1200 giveid can be a Giffen Gnd the tax rate is $12 per unit, the total tax revenue is...
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