Chapter 4 homework Questions 6, 8, and 16 Managerial Economics & Business Strategy Chapter 4 The Theory of Individual Behavior Normal Good
Income effect (+) Substitution effect (+) Total effect (+) How Draw?? Inferior Good Negative Income effect Substitution effect will always be the same direction no matter what the type of good A decline in the price will lead to more of that good consumed
How draw?? Can we do it?? (number 17) A common marketing tactic among many liquor stores is to offer their clientele quantity (or volume) discounts. For instance, the second-leading brand of wine exported from Chile sells in the US for $8 per bottle if the consumer purchases up to eight bottles. The price of each additional bottle is only $4. If a consumer has $100 to divide between purchasing this brand of wine and other goods, graphically illustrate how this marketing tactic affects the consumers budget line if the price of the other good is $1. Will a consumer ever purchase exactly eight bottles of wine? Explain.
Is this useful?? Y An individuals demand curve is derived from each new equilibrium point found on the indifference curve as the price of good X is varied. II
I $ X P0 P1 D X0 X1 X
Market Demand The market demand curve is the horizontal summation of individual demand curves. It indicates the total quantity all consumers would purchase at each price point. $ 50 Individual Demand Curves $
Market Demand Curve 40 D1 1 2 D2 Q 1 2 3 DM Q
Why do firms use buy one get one free?? Buy one pizza at full price and get a second pizza free Budget line changes after purchase of one pizza Flat (zero slope) for SECOND PIZZA only Then falls normally Allows you to reach a higher indifference curve
Consumer better off Is the firm better off?? Consumers like the firm for doing this repeat business Consumer may buy more pizzas A Classic Marketing Application Other goods (Y)
A buy-one, get-one free pizza deal. A C E D II I 0
0.5 1 2 B F Pizza (X)
Do you want a gift or cash for your birthday?? Cash moves you to a higher indifference curve Expands your possible consumption bundle With cash you can purchase anything from anywhere
The Department of Justice narrowed the definition of service animals to dogs and miniature horses, but this does not affect the Department of Transportation's definition recognizing the possibility that other animals can be service animals. Service Animals, Continued. Photo: young...
Uniform Cost Search - shortest path in a weighted graph. Only expands priority queue (fringe) as graph is traversed. Same time complexity, more memory efficient (in practice) A* - shortest path in a weighted graph. Only expands priority queue (fringe)...
Applied quantitative analysisa practical introduction SOSM-405 (5 cr)Session 1: Getting started. Tue 8-10, Period III, Jan-Feb 2018 . Faculty of Social Sciences / University of Helsinki. Teemu Kemppainen. [email protected]
2010 Survey of Business 1,600 Businesses Invited to Participate 152 Businesses Responded 55 Responses Gathered by Webster High School Students / Remainder responded directly on-line 10% Response Rate Good Cross- Section of Businesses Responded Business Location 33% in Village of...
The rock cycle The rock cycle: in words The rock cycle: summary Glossary Anagrams Multiple-choice quiz From weathering to sedimentation Photo credit: R. I. Tilling / USGS Image shows D.W. Peterson lowering a lava tube at Mauna Ulu during the...
Hinduism & Buddhism Hinduism "God is one, but wise people know it by many names." PowerPoint Presentation Understanding Hinduism & the Caste System PowerPoint Presentation Caste System: 5 Levels PowerPoint Presentation PowerPoint Presentation Buddhism PowerPoint Presentation Beliefs of Buddhism Tibetan...
Search Engines Richard A Fisher From deadlock.com tutorial Introduction What are search engines Don't take sweets from strangers Treat your web like your resume Agenda How search engines work Choosing keywords Preparing your pages Submitting your pages Yahoo How They...
Ready to download the document? Go ahead and hit continue!