Suppose I = $100, PA = $10, P8 = $12.50, Pc = $8 You've rated the...

Transcribed Image Text:

Suppose I = $100, PA = $10, P8 = $12.50, Pc = $8 You've rated the rest. as follows: Rest. Cuisine Decor #meals ABC 8C 2D 100/10 = 10 90 9 D 100/12.5=8 2C BD 100/8=12.5 Cuisine A 80- 72 25 88 2 2 89 Rest A B Total C+ D 10 [8C 20]-80C20D 89c90]=72C720 12.5C2C 8D]=25C100D Rest B Rest Decor ABC attribute frontier / efficiency frontier: = shows max. cuisine and decor, given. I, Prices, Ratings Which rest. do you select? Depends on your taste ie. Your ind. curves you select B an older person (who favours Cover D) would choose A to maximize well-beings, select a Possibility 1: Rest. are mutually exclusive ie. cannot select a combination ic. must select only one. eg. Rest. A in Singapore Rest. B Rest. C in Have $100 for in Paris New York City the weekend Select rest. which places you on highest poss. ind. Curve .. compare ind curves through A, B, and C Corner point Possibility 2: Can select. a combination What happens if no tangency at a corner point? eg. Bin 2 possibilities C in A in Port Dalhousie South St. Catharines. Thorold Cuisine Rest. , TV=90 A TU=100 A Rest B Rest Rest A E Rest ->c TU=60 TU:75 Decor This study source was downloaded by 100000794070642 from Course Hero.com on 12-09-2023 16:35:35 GMT -06:00 https://www.coursehero.com/file/38825252/ECON-2P23-D2-S1-2018-11-06-Lecturedocx/ 2 E J Rest This study source was downloaded by 100000794070642 from CourseHero.com on 12-09-2023 16:35:35 GMT -06:00 https://www.coursehero.com/file/38825252/ECON-2P23-D2-S1-2018-11-06-Lecturedocx/ 3 Select B+C, How much do you spend First, must det. #meals from each on each? Start at C, switch at K to get to E OR Start at B, switch at J to get to E To det. #meals from each, suppose start at B. At J, cuisine from B is 18 :: #meals from B = 18 = 2 expenditure on 9 B=2(12.50)=25 oo expenditure on C = 100-25=$75 80 #meals from ( = 15 = 9.375 This study source was downloaded by 100000794070642 from CourseHero.com on 12-09-2023 16:35:35 GMT -06:00 https://www.coursehero.com/file/38825252/ECON-2P23-D2-S1-2018-11-06-Lecturedocx/ 4 ECON 2P23 Nov 8/2018 APP 10 Attribute Theory Example from last day: Given I-$100 Rest Cuisine, Decor Price #meals total A C 822 JBL 80 2D 10 100/10 10[8C 20] 90 9D $12.50 100/12.5 859090] 2C 80 $8 100/8 12.5[2C 8D] Rest A T A B This study source was downloaded by 100000794070642 from CourseHero.com on 12-09-2023 16:34:11 GMT -06:00 https://www.coursehero.com/file/38825184/ECON-2P23-D2-S1-2018-11-08-Lecturedocx/ Rest B Rest C D To arrive at E, OJE At J, cuisine from B=18 18 #meals required to obtain 18c from B = 9 = 2 meals % expend on B = 2(12.50) = $25 oo expend on C = 100-25=$75 # men's from (= 75 - 9.375 Alternatively, could get to E by starting at C, going up to B ic. OKE A+ K cuisine from C= 18.75 #meals required to obtain 18.75C from C = 18.75 -=9.375 2 expend on C=9.375 (8)=$75 expend on B = 100-75= $25 :. #meals from B=2555 = 2 meals. 2 This study source was downloaded by 100000794070642 from Course Hero.com on 12-09-2023 16:34:11 GMT -06:00 https://www.coursehero.com/file/38825184/ECON-2P23-D2-S1-2018-11-08-Lecturedocx/ Example: Rest Your parents own Rest. B, making is making lots of profits. Using data from previous example: Rest A a nice living, but Rest B A B B Rest C D What is your advice to your parents who want to increase their business? (1) spend more on Decor, less on cuisine (move OB-> OC) If do so, would share customers (2) decrease price (move up OB) What price do you charge? To Good advice? get you to B' This study source was downloaded by 100000794070642 from Course Hero.com on 12-09-2023 16:34:11 GMT -06:00 https://www.coursehero.com/file/38825184/ECON-2P23-D2-S1-2018-11-08-Lecturedocx/ 3 Suppose I = $100, PA = $10, P8 = $12.50, Pc = $8 You've rated the rest. as follows: Rest. Cuisine Decor #meals ABC 8C 2D 100/10 = 10 90 9 D 100/12.5=8 2C BD 100/8=12.5 Cuisine A 80- 72 25 88 2 2 89 Rest A B Total C+ D 10 [8C 20]-80C20D 89c90]=72C720 12.5C2C 8D]=25C100D Rest B Rest Decor ABC attribute frontier / efficiency frontier: = shows max. cuisine and decor, given. I, Prices, Ratings Which rest. do you select? Depends on your taste ie. Your ind. curves you select B an older person (who favours Cover D) would choose A to maximize well-beings, select a Possibility 1: Rest. are mutually exclusive ie. cannot select a combination ic. must select only one. eg. Rest. A in Singapore Rest. B Rest. C in Have $100 for in Paris New York City the weekend Select rest. which places you on highest poss. ind. Curve .. compare ind curves through A, B, and C Corner point Possibility 2: Can select. a combination What happens if no tangency at a corner point? eg. Bin 2 possibilities C in A in Port Dalhousie South St. Catharines. Thorold Cuisine Rest. , TV=90 A TU=100 A Rest B Rest Rest A E Rest ->c TU=60 TU:75 Decor This study source was downloaded by 100000794070642 from Course Hero.com on 12-09-2023 16:35:35 GMT -06:00 https://www.coursehero.com/file/38825252/ECON-2P23-D2-S1-2018-11-06-Lecturedocx/ 2 E J Rest This study source was downloaded by 100000794070642 from CourseHero.com on 12-09-2023 16:35:35 GMT -06:00 https://www.coursehero.com/file/38825252/ECON-2P23-D2-S1-2018-11-06-Lecturedocx/ 3 Select B+C, How much do you spend First, must det. #meals from each on each? Start at C, switch at K to get to E OR Start at B, switch at J to get to E To det. #meals from each, suppose start at B. At J, cuisine from B is 18 :: #meals from B = 18 = 2 expenditure on 9 B=2(12.50)=25 oo expenditure on C = 100-25=$75 80 #meals from ( = 15 = 9.375 This study source was downloaded by 100000794070642 from CourseHero.com on 12-09-2023 16:35:35 GMT -06:00 https://www.coursehero.com/file/38825252/ECON-2P23-D2-S1-2018-11-06-Lecturedocx/ 4 ECON 2P23 Nov 8/2018 APP 10 Attribute Theory Example from last day: Given I-$100 Rest Cuisine, Decor Price #meals total A C 822 JBL 80 2D 10 100/10 10[8C 20] 90 9D $12.50 100/12.5 859090] 2C 80 $8 100/8 12.5[2C 8D] Rest A T A B This study source was downloaded by 100000794070642 from CourseHero.com on 12-09-2023 16:34:11 GMT -06:00 https://www.coursehero.com/file/38825184/ECON-2P23-D2-S1-2018-11-08-Lecturedocx/ Rest B Rest C D To arrive at E, OJE At J, cuisine from B=18 18 #meals required to obtain 18c from B = 9 = 2 meals % expend on B = 2(12.50) = $25 oo expend on C = 100-25=$75 # men's from (= 75 - 9.375 Alternatively, could get to E by starting at C, going up to B ic. OKE A+ K cuisine from C= 18.75 #meals required to obtain 18.75C from C = 18.75 -=9.375 2 expend on C=9.375 (8)=$75 expend on B = 100-75= $25 :. #meals from B=2555 = 2 meals. 2 This study source was downloaded by 100000794070642 from Course Hero.com on 12-09-2023 16:34:11 GMT -06:00 https://www.coursehero.com/file/38825184/ECON-2P23-D2-S1-2018-11-08-Lecturedocx/ Example: Rest Your parents own Rest. B, making is making lots of profits. Using data from previous example: Rest A a nice living, but Rest B A B B Rest C D What is your advice to your parents who want to increase their business? (1) spend more on Decor, less on cuisine (move OB-> OC) If do so, would share customers (2) decrease price (move up OB) What price do you charge? To Good advice? get you to B' This study source was downloaded by 100000794070642 from Course Hero.com on 12-09-2023 16:34:11 GMT -06:00 https://www.coursehero.com/file/38825184/ECON-2P23-D2-S1-2018-11-08-Lecturedocx/ 3