Microeconomics

Complete the following problems from your text: * Chapter 5: Applied ticktack 1 * Bridget has a limited income and consumes only vino and make pass up; her current consumption weft is four bottles of wine and 10 pounds of lay off. The price of wine is $10 per bottle, and the price of cheese is $4 per pound. The last bottle of wine added 50 units to Bridgets service program, time the last pound of cheese added 40 units. * a. Is Bridget making the utility-maximizing choice? Why or why not? $10 x 4 bottles = $40 $4 x 10 pounds =$40 Total of $80 spent MRS = MUX/PX = MUY/PY MRS=50U/10=$5 wine MRS=40U/4=$10 cheese MUX/P is less than MUy/P; therefore Bridget is not maximizing the utility-maximizing choice. * b. If not, what should she do instead? Why? According to our text, the consumer should reallocate expense on X and Y in pasture to addition utility while spending the same amount of money ($80) (Thomas, 2011). * Chapter 6: Applied Problem 1 * In an member slightly the financial problems of USA Today, Newsweek reported that the pa- per was losing about $20 jillion a year. A groin Street psychoanalyst ordinate that the paper should wage annex its price from 50 cents to 75 cents, which he estimated would bring in an additional $65 million a year.

The papers newspaper publisher rejected the idea, construction that circulation could throw sharply after a price ontogenesis; citing The Wall Street Journals experience after it change magnitude its price to 75 cents. What implicit assumptions ar the publisher and the analyst making about price centerin g? The implicit assumptions make by the ana! lyst are that the path to help resign the financial problems of USA Today is to raise the price by 25cents. According to our text if a guild raises the price of a product, the total revenue will increase if the metre exchange remained the same (Thomas, 2011). He does not condition into consideration that the quantity sold could decrease and not lead the expected revenue. The publisher is making the...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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