Use an indifference curve (Chapter) diagram (gift goods on one axis and all other goods on the other) to illustrate that a consumer is better off receiving cash rather than a gift. Relate your analysis to the Mini- Case “The Deadweight Loss of Christmas Presents.”
Answer to relevant QuestionsThe government sets a minimum wage above the current equilibrium wage. What effect does the minimum wage have on the market equilibrium? What are its effects on consumer surplus, producer surplus, and total surplus? Who are ...If the inverse demand function is p = 300 – 3Q, what is the marginal revenue function? Draw the demand and marginal revenue curves. At what quantities do the demand and marginal revenue lines hit the quantity axis? Show that after a shift in the demand curve, a monopoly’s price may remain constant but its output may rise.When the iPod was introduced, Apple’s constant marginal cost of producing its top-of-the-line iPod was $ 200 (iSuppli), its fixed cost was approximately $ 736 million, and we estimate that its inverse demand function was p ...Based on the information in the “Botox” Mini- Case, what would happen to the equilibrium price and quantity if the government had set a price ceiling of $ 200 per vial of Botox? What welfare effects would such a policy ...
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