(answered) – 1 Sarah signed up with Netflix for a fixed fee of 15.98 dollarsDescriptionSolution downloadThe Question1? Sarah signed up with Netflix for a fixed fee of 15.98 dollars per month. For this fee, she can receive upto 1 DVD at a time in the mail and exchange each DVD as often as she likes. She also receives unlimited instant access to movies be- ing streamed from Netflix to her computer or TV. During the average month in 2012, Sarah received and watched 6 movies sent to her through the mail and she watched an additional 13 movies that were streamed to her computer. What is the average cost of a movie to Sarah? What is the marginal cost of an additional movie? ?2 Dr. Falk is a dentist who performs two basic procedures: Fill- ing cavities and whitening teeth. Falk charges 50 dollar per cavity filled , a process that takes him 15 mins per tooth and requires no help or materials. For tooth whitening, a process requiring 30 minutes, Falk charges 150 dollars net of materials . Again, no help is requires. Is anything puzzling about Falk?s pricing pattern? Explain your answer. ?3 During the last 10 years Orlando, Florida , grew rapidly, with ?new jobs luring young people into the area. Despite increases ?in population and income growth that expanded demand for ?housing , the price of existing houses barely increased. Why? ?Illustrate your answer with supply and demand curves.4 During 2009, incomes fell sharply for many Americans . This change would likely lead to a decrease in the prices of both normal and inferior goods.5 The following set of statements contain common errors. Identify and explain each error.A)Demand increases, causing prices to rise. Higher prices cause demand to fall. Therefore prices fall back to their original levels.B)The supply of meat in Russia increases , causing meat prices to fall. Lower prices mean that the demand for meat in Russian households will increase.6) Suppose the demand and supply for eggs in the United states are given by Qd = 100 20P and Qs = 10 + 40P respectively, where Qd = millions of dozens of eggs Americans would like to buy each year; Qs of dozens of eggs US farms would like to sell each year; and P = price per dozen eggs. Do the following, clearly wriing the units of measurement wherever requireda. Write the demand schedule and then draw the demand curveb. Write the supply schedule and then draw the supply curve?c.Find the equilibrium price and quantity mathematically by solving the equationsd. Graph the demand and supply curves (as before) and identify the equilibrium price and quantitye. Why is an equilibrium ?stable? from an economy?s point of view?(?8)Suppose the market demand for Burritos is given by Qd = 40 5P and the market supply for Burritos is given by Qs = 10P 20, where P = price per burrito.a. Graph the supply and demand schedules for Burritos?b. What is the equilibrium price and quantity?c. Calculate the Consumer Surplus, Producer Surplus, and identify these on the graph. ?9) Describe what will happen to total revenue in the following situations:1. Price decreases and demand is elastic?2. Price decreases and demand is inelastic?3. Price increases and demand is elastic?4. Price increases and demand is inelastic?5. Price increases and demand is unitary elastic?6. Price decreases and demand is perfectly inelastic7. Price increases and demand is perfectly elastic
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