General Instructions for all Assignments, writing homework help

General Instructions for all Assignments

1.
Unless specified differently by your course instructor, save this assignment
template to your computer with the following file naming format: Course number_section
number_Last_First_unit number

2. At
the top of the template, insert the appropriate information: Your Name, Course
Number and Section, and the Date

3.
Insert your answers below, or in the appropriate space provided for in the
question. Your answers should follow APA format with citations to your sources
and, at the bottom of your last page, a list of references. Your answers should
also be in Standard English with correct spelling, punctuation, grammar, and
style (double spaced, in Times New Roman, 12–point, and black font). Respond to questions
in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions.

4.
Upload the completed Assignment to the appropriate Dropbox.

5. Any
questions about the Assignment, or format questions, should be directed to your
course instructor.

Assignment 

In this Assignment, you will calculate the Price
Elasticity of Demand, demonstrate a firm understanding of consumer choices
based on differing marginal utilities, consumer surplus, and how the buying
choice and amount of consumer surplus changes based on various pricing schemes.

In
this Assignment, you will be assessed on the following outcome:

AB224-5:Demonstrate how the concept of utility affects
purchasing decisions by individuals and consumer surplus.

Questions 

1. The accompanying
table shows the price and monthly demand for barrels of gosum berries in Gondwanaland.

Price of gosum berries per barrel	Native Demand for gosum berries per month
$100	0
$90	100
$80	200
$70	300
$60	400
$50	500
$40	600
$30	700
$20	800
$10	900
$0	1000

1. Using
   the midpoint method (show your work), calculate the price elasticity of
   demand when the price of barrel of gosum berries rises from $10 to $20.
   What does this estimate imply about the price elasticity of demand of
   gosum berries?

1. Using
   the midpoint method (show your work), calculate the price elasticity of
   demand when the price of barrel of gosum berries rises from $70 to $80.
   What does this estimate imply about the price elasticity of demand of
   gosum berries?

 

1. Notice that the estimates from (a) and (b) above are
   different. Why do price elasticity of demand estimates change along the
   demand curve?

2. Matilda is downloading
music and videos from an online site. She is currently buying three music
downloads that cost $3 each and two video downloads that also cost $3 each. The
table below indicates what she reports as the marginal utility of the last
music download and of the last video download in this combination of purchases.

	Quantity	Price per Download	MU per download
Music downloads	3	$3	60
Video downloads	2	$3	45

As an
assignment for her Microeconomics course, Matilda used the marginal utilities
that she gave to her 3^rd music download and her 2^nd video
download to complete the Experiment Tally Sheet below.

1. A consumer
   maximizes utility when the last dollar spent on any good generates the same
   satisfaction as the last dollar spent on every other good. Is Matilda
   maximizing her utility? Explain your answer.

2. Should
   Matilda consume one more video download, to move her closer to her optimum
   utility?Explain your answer.

3. Should
   Matilda consume one less music
   download and one more video
   download, to move her closer to her optimum utility?Explain your answer.

4. Should
   Matilda consume one more music download, to move her closer to her optimum
   utility?Explain your answer.

   3. Brandon and his
   family often rent movies from the new internet movie streaming service, Xanadu.
   The table below shows Brandon’s demand schedule for eight movie rentals that
   Brandon’s family is interested in watching.

Number of internet video rentals	Willingness to pay each rental
1st movie rental	$7
2nd movie rental	$6
3rd movie rental	$5
4th movie rental	$4
5th movie rental	$3
6th movie rental	$2
7th movie rental	$1
8th movie rental	$0

a. If the
price of the price of each movie rental from Xanadu is $3, how many movie
rentals will Brandon buy and how much consumer surplus does Brandon receive? Explain
your answer.

b. If
the price of the price of each movie rental from Xanadu is $5, how many movie
rentals will Brandon buy and how much consumer surplus does Brandon receive? Explain
your answer.

c. If
the Xanadu online service offers as many movie rentals as the customer wants to
download, all for on-time yearly subscription fee of $25.00, how many movie
rentals will Brandon download and how much consumer surplus will Brandon
receive? Explain your answer.

 

d. If
the Xanadu online service offers as many movie rentals as the customer wants to
download, all for on-time yearly subscription fee of $35.00, how many movie
rentals will Brandon download and how much consumer surplus will Brandon
receive? Explain your answer.

e. If the
Xanadu’s market research showed that Brandon’s demand represented what most of
Xanadu’s customers wanted, what would be the most that Xanadu could charge as a
one-time annual fee for all the downloads that the customer wanted?

4. Newspaper vending
machines are designed so that once you have paid for one paper; you have access
to all the papers in the machine and could take multiple papers at a time.
However, other vending machines dispense only one item (the item you bought).
You do not have access to all the goods (sodas, candy, snacks, etc.) at one
time. Using the concept of marginal utility, explain why these vending machines
differ?