Martha, Sattam and Frank live together in an apartment. The respective demand curves for weekly hours of cleaning are given by: Martha: P : 28 0.6Q Sattam: P : 9 0.60 Frank: P : 44.1 0.6Q The marginal cost of supplying cleaning is $23? per hour. Suppose that Martha, Sattam and Frank had to individually and independently decide how many hours of cleaning to pay for. How many hours of cleaning will be purchased in this case? Answer: l l Suppose that the market demand and supply for bicycles in Sydney are given as follows: Demand: P = 88 - 3'1Q Supply: P = Q The government wants to encourage the uptake of cycling as an alternative form of transport to alleviate congestion on Sydney's roads through a subsidy. What must the size ot the subsidy be in order to increase the quantity of bicycles transacted by 9? Answer: l l Jenny's Dough Though is a microsbakery selling only sourdough bread in a perfectly competitive market. Its hourly production costs are shown below: Quantity Total Cost Average Average Variable Cost Total Cost 0 $11.7 - - 1 $15.6 $3.9 $15.6 2 $23.4 $5.2 $11.7 3 $35.1 $7.8 $11.7 4 $52 $10.4 $13 5 $78 $13 $15.6 6 $117 $18.2 $19.5 Which of these prices implies that Jenny can only stay open in the short run? O A. Any of the other prices. 0 B. $2.60 0 C. $14.30 0 D. $19.50 O E. $5.20 Suppose in a market, the demand curve is given by P = 47 3Q and the supply curve is given by P : 2 + 30. Now, suppose the government decides to implement a price ceiling of Pc = $1 i. Calculate the deadweight loss associated with this policy. Answer: l l Ellora's Electric Scooters has a monopoly in the electric scooter market. The market demand schedule is given by: Price Quantity $146.61 5 $136.61 10 $126.61 15 $116.61 20 $106.61 25 Ellora's has no fixed costs and a constant marginal cost of $100. What is the maximum profit Ellora's Scooters can earn? O a. $409.93 0 b. $332.20 0 c. $233.05 C d. $366.10 D e. $399.15