1. Below are the marginal willingness-to-pay schedules for organic apples for two individuals: ex. Jill's willingness...

 

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1. Below are the marginal willingness-to-pay schedules for organic apples for two individuals: ex. Jill's willingness to pay for the first apple is $4.00 Consumption Level (Apples per week) 1 2 3 4 5 6 7 8 Jill 4.00 3.20 2.60 2.20 1.80 1.50 1.30 1.20 Marginal WTP ($) John 5.20 4.00 3.00 2.10 1.30 0.60 0.30 0.00 a. Construct the aggregate marginal willingness-to-pay (the demand) curve for this group of two people. Hint: Use prices of $6.00-$1.00 (10 points) b. What is Jill's total willingness to pay at a consumption level of 4 apples? (2 points) c. If the price of organic apples is $1.70, how many apples would Jill consume, and how many apples would John consume? (4 points) 2. Consider the marginal cost curve associated with cleaning your room. a. Label the vertical axis "time" and the horizontal axis "Percent clean" (0%-100%). What would this marginal cost curve look like? (2 points) b. If somebody invents a small machine that electrostatically is able to remove dust from rooms very quickly. What would this do to the marginal cost curve if cleaning your room depicted in a? (2 points) 1. Below are the marginal willingness-to-pay schedules for organic apples for two individuals: ex. Jill's willingness to pay for the first apple is $4.00 Consumption Level (Apples per week) 1 2 3 4 5 6 7 8 Jill 4.00 3.20 2.60 2.20 1.80 1.50 1.30 1.20 Marginal WTP ($) John 5.20 4.00 3.00 2.10 1.30 0.60 0.30 0.00 a. Construct the aggregate marginal willingness-to-pay (the demand) curve for this group of two people. Hint: Use prices of $6.00-$1.00 (10 points) b. What is Jill's total willingness to pay at a consumption level of 4 apples? (2 points) c. If the price of organic apples is $1.70, how many apples would Jill consume, and how many apples would John consume? (4 points) 2. Consider the marginal cost curve associated with cleaning your room. a. Label the vertical axis "time" and the horizontal axis "Percent clean" (0%-100%). What would this marginal cost curve look like? (2 points) b. If somebody invents a small machine that electrostatically is able to remove dust from rooms very quickly. What would this do to the marginal cost curve if cleaning your room depicted in a? (2 points)

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ANSWER 1 a To construct the aggregate marginal willingnesstopay demand curve for the group of two pe... View the full answer