CUFEExercise answerWord格式文档下载.docx

1、a. Use these data to estimate the price elasticity of demand for subway rides.b. According to your estimate, what happens to the Transit Authoritys revenue when the fare rises?c. Why might your estimate of the elasticity be unreliable?a. If quantity demanded falls by 4.3% when price rises by 20%, th

2、e price elasticity of demand is 4.3/20 = 0.215, which is fairly inelastic.b. Because the demand is inelastic, the Transit Authoritys revenue rises when the fare rises.c. The elasticity estimate might be unreliable because it is only the first month after the fare increase. As time goes by, people ma

3、y switch to other means of transportation in response to the price increase. So the elasticity may be larger in the long run than it is in the short run.2. The cost of producing stereo systems has fallen over the past several decades. Lets consider some implications of this fact.a. Draw a demand-and

4、-supply diagram to show the effect of falling production costs on the price and quantity of stereos sold.b. In your diagram, show what happens to consumer surplus and producer surplus.c. Suppose the supply of stereos is very elastic. Who benefits most from falling production costs consumers or produ

5、cers of stereos?a. The effect of falling production costs in the market for stereos results in a shift to the right in the supply curve, as shown in the figure below. As a result, the equilibrium price of stereos declines and the equilibrium quantity increases.b. The decline in the price of stereos

6、increases consumer surplus from area A to A + B + C + D, an increase in the amount B + C + D. Prior to the shift in supply, producer surplus was areas B + E （the area above the supply curve and below the price）. After the shift in supply, producer surplus is areas E + F + G. So producer surplus chan

7、ges by the amount F + G B, which may be positive or negative. The increase in quantity increases producer surplus, while the decline in the price reduces producer surplus. Because consumer surplus rises by B + C + D and producer surplus rises by F + G B, total surplus rises by C + D + F + G.c. If th

8、e supply of stereos is very elastic, then the shift of the supply curve benefits consumers most. To take the most dramatic case, suppose the supply curve were horizontal, as shown in Figure 12. Then there is no producer surplus at all. Consumers capture all the benefits of falling production costs,

9、with consumer surplus rising from area A to area A + B.1. Four roommates are planning to spend the weekend in their hostel room watching old movies, and they are debating how many to watch. Their willingness to pay for each movie is:SharonAi BengHui ShinYee HuiFirst Movie$7$5$3$2Second Movie$6$4$1Th

10、ird Movie$0Fourth MovieFifth Moviea. Within the hostel room, is the showing of a movie a public good? Why or why not?b. If it costs $8 to rent a movie video, how many videos should the roommates rent to maximize total surplus?c. If they choose the optimal number from part （b） and then split the cost

11、 of renting the videos equally, how much surplus does each person obtain from watching the movies?a. Within the hostel room, the showing of a movie is a public good. None of the roommates can be excluded from viewing the movie. Because one roommates viewing does not affect the ability of another roo

12、mmate to view the movie, the good is also non-rival in consumption.b. The roommates should rent three movies because the value of the fourth film （$6） would be less than the cost （$8）.c. The total cost would be $8 3 = $24. If the cost were divided evenly among the roommates, each would pay $6. Sharo

13、n values three movies at $18 so her surplus would be $12. Ai Beng values three movies at $12 so her surplus would be $6. Hui Shin values three movies at $6, so her surplus would be $0. Yee Hui values three movies at $3 so her surplus is -$3. Total surplus among the four roommates would be $15.Surplu

14、s$12-$31. Healthy Harrys Juice Bar has the following cost schedules:Q（cups）123456Variable Cost （$）10254570100135Total Cost （$）30405575130165a. Calculate average variable cost, average total cost and marginal cost for each quantity.b. Graph all three curves. What is the relationship between the margi

15、nal cost curve and the average total cost curve? What is the relationship between the marginal cost curve and the average variable cost curve? Explain.a. The following table shows average variable cost （AVC）, average total cost （ATC）, and marginal cost （MC） for each quantity.b. The figure below show

16、s the three curves. The marginal-cost curve is below the average-total cost curve when output is less than four and average total cost is declining. The marginal-cost curve is above the average-total-cost curve when output is above four and average total cost is rising. The marginal-cost curve lies

17、above the average-variable-cost curve.1. What components of GDP （if any） would each of the following transactions affect?（a） Your neighbour buys a new refrigerator.（b） Your uncle buys a new house.（c） The government hires teachers to provide free education to the people.（d） Your parents buy a bottle

18、of French wine（e） A Switzerland Drugs Company set up a lab in Singapore for testing drugs1. a. Consumption increases because a refrigerator is a good purchased by a household.b.Investment increases because a house is an investment good.c.Government purchases increase because the government spent mon

19、ey to provide a good to the public.d.Consumption increases because the bottle is a good purchased by a household, but net exports decrease because the bottle was imported.e.Investment increases because new structures and equipment were built.2. Below are some data from an economy:YearPrice per footb

20、allQuantity of footballsPrice per baseballQuantity of baseballs2005$10200$82006142007350125（a） Compute nominal GDP, real GDP, and the GDP deflator for each year, suing 2005 as the base year.（b） Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2006 and 2007 from the pre

21、ceding year. For each year, identify the variable that does not change. Explain in words why your answer makes sense.（c） Did economic well-being rise more in 2006 or 2007?2. a. Calculating nominal GDP:2005: （$10 per football 200 footballs） + （$8 per baseball 75 baseballs） = $2,6002006: （$14 per foot

22、ball 200 footballs） + （$10 per baseball 75 baseballs） = $3,550 2007: 350 footballs） + （$10 per baseball 125 baseballs） = $6,150 Calculating real GDP （base year 2005）:2007: 350 footballs） + （$8 per baseball 125 baseballs） = $4,500 Calculating the GDP deflator: （$200/$200） 100 = 100 （$3,550/$2,600） 100 = 137 （$6,150/$4,500） b. Calculating the percentage change in nominal GDP:Percentage change in nominal GDP in 2006 = （$3,550 $2,600）/$2,600 100 = 37%.Percentage change