Chapter 1 problems Assignment Example | Topics and Well Written Essays - 250 words

Chapter 1 problems - denomination ExampleHowever, my utility of attending the game give be higher as compared to that of Joe because I had already paid more to get the best seat. Addition bothy, if we were to draw an indifference curve, I will be at a higher indifference curve than Joe (Frank & Bernanke, 2013). Therefore, my likelihood of attending the game at Syracuse will also be higher than that of Joe. This is because even if I will be late for the game because of the rash I am assured of the best seat unlike Joe who did not even have a ticket to attend the game.The effects of change in footing on meter of garbage compile may be best explained by taking into consideration the law of demand and supply. This law states that when all other factors are held constant (ceteris Paribas) an make up in price may cause a lessen in quantity demanded (Arnold, 2010). On the contrary, a decrease in price may cause an increase in quantity demanded (Arnold, 2010). Therefore, in this case , the garbage was initially collected at $ 6 irrespective of the quantity causing the resident to supply even more grasss of garbage. On the other hand, the change in price tag may have two significant effects on quantity of garbage collected. stolon the quantity of garbage collected will remain the same per average house hold. This is because for each can of garbage to be collected, residents of my city will be paying $2 per can which sum up to $6 for cans per average household. This means that the price per 3 cans will still be the same as the initial fixed price (Arnold, 2010). The second effect is that, individual house hold may descend to supply less cans of garbage to minimize cost (Arnold, 2010).This is because consumers are rational which means that they always taste to minimize cost and maximize their utility subject to their income constraint (Arnold,