I recently went out to dinner with my brother and my family. We decided we wanted wings for an appetizer and had a choice of getting 10 wings for $4.95 or 20 wings for $7.95. I thought we should get 10;my brother thought we should get 20 and prevailed.
A: At the end of the meal, we noticed that there were 4 wings left. My brother then commented: €œI guess I am vindicated€”it really was the right decision to order 20 rather than 10 wings.€
(a) Is this a correct assessment; i.e. is the evidence of 4 wings at the end of the meal sufficient to conclude that my brother was right?
Graph 10.6: Wings Left Over

(b) What if no wings were left at the end of the meal?
(c) What if 10 wings were left?
(d) In order for us to leave wings on the table, which of our usual assumptions about tastes must be violated?
B: Suppose that our MWTP for wings (x) can be approximated by the function MWTP = Aˆ’ax.
(a) Given that 4 wings were left at the end of the meal, what must be the relationship between α and A?
(b) Suppose A = 8/3. Was my brother right to want to order 20 instead of 10 wings?
(c) Suppose instead that A = 2. Does your answer change? What if A = 4?
(d) If our tastes were Cobb-Douglas, could it ever be the case that we leave wings on the table?

Transcribed Image Text:

MOTP Io 16 wings