Question: 1. Bert, as a consumer, places the value on a pair of jeans as follows. Value of first pair: $70 Value of second pair: $60
1. Bert, as a consumer, places the value on a pair of jeans as follows.
Value of first pair: $70
Value of second pair: $60
Value of third pair: $50
Value of fourth pair: $40
Value of fifth pair: $30
Value of sixth pair: $20
Value of seventh pair: $10
Ernie, as a producer, pays the following cost to produce jeans.
Cost of first pair: $10
Cost of second pair: $20
Cost of third pair: $30
Cost of fourth pair: $40
Cost of fifth pair: $50
Cost of sixth pair: $60
Cost of seventh pair: $70
Using the information given above, answer the following questions.
(1) If the price is $20, how many pairs of jeans will be demanded by Bert?
(2) If the price is $20, how many pairs of jeans will be supplied by Ernie?
(3) Explain the reason why $30 price is not an equilibrium price.
(4) What is behind the force that moves the price from $30 to the equilibrium level?
2. If the price of milk rises, what will happen to the demand for gasoline? You need to provide an explanation for a possible link between the price of milk and the demand for gasoline.
3. Bert, as a consumer, places the value on a pair of jeans as follows.
Value of first pair: $70
Value of second pair: $60
Value of third pair: $50
Value of fourth pair: $40
Value of fifth pair: $30
Value of sixth pair: $20
Value of seventh pair: $10
Ernie, as a producer, pays the following cost to produce jeans.
Cost of first pair: $10
Cost of second pair: $20
Cost of third pair: $30
Cost of fourth pair: $40
Cost of fifth pair: $50
Cost of sixth pair: $60
Cost of seventh pair: $70
Using the information given above, answer the following questions.
- If five pairs of jeans were ordered, what price will Ernie charge per pair? What kind of function is being used to answer the question?
- If five pairs of jeans are available to buy, what price is Bert willing to pay per pair? What kind of function is being used to answer the question?
- If the price is $40, what is the size of the consumer surplus?
- If the price is $40, what is the size of the producer surplus?
4.
- In the Professor Park’s lecture for consumer surplus for an indivisible good, what is the size of consumer surplus derived from the purchase of the first hamburger?
- Checkpoint Question 4-3-4. In the Professor Park’s lecture for consumer surplus for a divisible good, what is the size of total consumer surplus derived from the purchase of three pounds of meat?
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Lets address each question stepbystep Set of Questions 1 1 If the price is 20 how many pairs of jeans will be demanded by Bert Step 1 Identify the pairs Bert is willing to buy at or above 20 Step 2 Va... View full answer
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