|
Table 11-1
14. Consider the town of Springfield with only three residents,
Sophia, Amber, and Cedric. The three residents are trying to
determine how large, in acres, they should build the public park.
The table below shows each resident’s willingness to pay for each
acre of the park.
|
Acres
|
Sophia
|
Amber
|
Cedric
|
|
1
|
$10
|
$24
|
$6
|
|
2
|
8
|
18
|
5
|
|
3
|
6
|
14
|
4
|
|
4
|
3
|
8
|
3
|
|
5
|
1
|
6
|
2
|
|
6
|
0
|
4
|
1
|
|
7
|
0
|
2
|
0
|
|
|
Refer to Table 11-1. Suppose the cost to build
the park is $24 per acre and that the residents have agreed to
split the cost of building the park equally. To maximize his own
surplus, how many acres would Cedric like Springfield to build?
17. When the price of a bracelet was $28 each, the jewelry shop
sold 128 per month. When it raised the price to $32 each, it sold
112 per month. Using the midpoint method, the price elasticity of
demand for bracelets is
18. In a competitive market, the actions of any single buyer or
seller will
|
a.
have a negligible impact on the market price.
|
|
|
|
b.
have little effect on market equilibrium quantity but will
affect market equilibrium price.
|
|
|
|
c.
affect marginal revenue and average revenue but not price.
|
|
|
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d.
adversely affect the profitability of more than one firm in the
market.
|
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19. When a certain monopoly sets its price at $8 it sells 64
units. When the monopoly sets its price at $10 it sells 60 units.
The marginal revenue for the firm over this range is
20.Holding all other forces constant, if increasing the price of
a good leads to an increase in total revenue, then the demand for
the good must be
|
|
|
|
|
|
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d.
None of the above is correct because a price increase always
leads to an increase in total revenue.
|
|