Difference between revisions of "Economics Homework Four Answers - Student Nine"
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Economics Homework, Mark | Economics Homework, Mark | ||
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'''1.''' Utility | '''1.''' Utility | ||
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| + | :Correct, but you might say TOTAL utility. | ||
'''2.''' (a) Your consumer surplus is $1000. | '''2.''' (a) Your consumer surplus is $1000. | ||
(b) The consumer surplus is the total benefit which a buyer gets when buying a good. For example, if someone wanted a new laptop so badly that he was willing to pay $1800 for it, and he bought it for $1500, then his consumer surplus is $300. Consumer surplus = total benefit - total cost | (b) The consumer surplus is the total benefit which a buyer gets when buying a good. For example, if someone wanted a new laptop so badly that he was willing to pay $1800 for it, and he bought it for $1500, then his consumer surplus is $300. Consumer surplus = total benefit - total cost | ||
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| + | :Terrific answers, may use (b) as a model. | ||
'''3.''' You can spend your time best by hiking for 3 hours, and then reading for 2 hours. The three hours of hiking give you a total utility of 23 units, and the 2 hours of reading give you a total utility of 11 units. twenty-three plus eleven is 34, so your total utility was 34. | '''3.''' You can spend your time best by hiking for 3 hours, and then reading for 2 hours. The three hours of hiking give you a total utility of 23 units, and the 2 hours of reading give you a total utility of 11 units. twenty-three plus eleven is 34, so your total utility was 34. | ||
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| + | :Almost right. Hike for '''2 hours''', then read, then hike. Total utility is right. (Minus 1). | ||
'''4.''' In order to maximize my benefits from the purchase, I would tell the dealer that the car was used, and therefore not worth as much. The free market will drive the price down. | '''4.''' In order to maximize my benefits from the purchase, I would tell the dealer that the car was used, and therefore not worth as much. The free market will drive the price down. | ||
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| + | :Excellent. | ||
'''5.''' If there are two goods that are perfect substitutes for each other, then you are equally happy with 1 of good X as you are with 1 of good Y. Because you are indifferent whether you have 1 of one good and 1 of another, you can subtract 1 of good X and add 1 of good Y and still be on the indifference curve. | '''5.''' If there are two goods that are perfect substitutes for each other, then you are equally happy with 1 of good X as you are with 1 of good Y. Because you are indifferent whether you have 1 of one good and 1 of another, you can subtract 1 of good X and add 1 of good Y and still be on the indifference curve. | ||
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| + | :Explained well. | ||
'''6.''' The substitution effect happens when the price of a good increases, and people tend not to buy as much of it. They buy instead cheaper substitutes. | '''6.''' The substitution effect happens when the price of a good increases, and people tend not to buy as much of it. They buy instead cheaper substitutes. | ||
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| + | :Right, you might link to the Law of Demand. | ||
'''7.''' The free market usually comes first, because to give money to charity you have to earn it somehow. | '''7.''' The free market usually comes first, because to give money to charity you have to earn it somehow. | ||
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| + | :Right. | ||
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| + | :Excellent work. 69/70. Congratulations.--[[User:Aschlafly|Andy Schlafly]] 15:09, 11 October 2009 (EDT) | ||
Revision as of 19:09, October 11, 2009
Economics Homework, Mark
1. Utility
- Correct, but you might say TOTAL utility.
2. (a) Your consumer surplus is $1000.
(b) The consumer surplus is the total benefit which a buyer gets when buying a good. For example, if someone wanted a new laptop so badly that he was willing to pay $1800 for it, and he bought it for $1500, then his consumer surplus is $300. Consumer surplus = total benefit - total cost
- Terrific answers, may use (b) as a model.
3. You can spend your time best by hiking for 3 hours, and then reading for 2 hours. The three hours of hiking give you a total utility of 23 units, and the 2 hours of reading give you a total utility of 11 units. twenty-three plus eleven is 34, so your total utility was 34.
- Almost right. Hike for 2 hours, then read, then hike. Total utility is right. (Minus 1).
4. In order to maximize my benefits from the purchase, I would tell the dealer that the car was used, and therefore not worth as much. The free market will drive the price down.
- Excellent.
5. If there are two goods that are perfect substitutes for each other, then you are equally happy with 1 of good X as you are with 1 of good Y. Because you are indifferent whether you have 1 of one good and 1 of another, you can subtract 1 of good X and add 1 of good Y and still be on the indifference curve.
- Explained well.
6. The substitution effect happens when the price of a good increases, and people tend not to buy as much of it. They buy instead cheaper substitutes.
- Right, you might link to the Law of Demand.
7. The free market usually comes first, because to give money to charity you have to earn it somehow.
- Right.
- Excellent work. 69/70. Congratulations.--Andy Schlafly 15:09, 11 October 2009 (EDT)
