## [answered] 1.) If the average income increased from \$40,000 / year to

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1.)

If the average income increased from \$40,000 / year to

\$44,000 / year and the demand for take-out increased from

100 per night to 105 per night. Then what is the Income

Elasticity of Demand for Take-Out? What kind of product

will the take-out be considered?

2.)

Why does the marginal utility of good or service

decline? Does the Total Utility decline in the same way?

Explain in your own words.

3.)

How does a company decide to shut down or not to do

so? What is the rule they should follow? Explain in your

own word what the rule would be.

4.)

What does the perfect competition company's demand

curve look like? What does the demand and supply curve

look like for the INDUSTRY? Explain how and why it looks

like that? How is the Perfect Competition Industry &quot;Perfect&quot;

for? Why?

5.)

In Perfect Competition industry, how does a firm

decide how much to sell? Can they raise prices to make

6.)

True or False and why: In the Long Run, as a company

expands the company's total costs will increase, but the

&quot;cost / unit&quot; costs will decrease.

7.)

If the MU for a BMW (a luxury car) is greater than the

MU for a Toyota (standard car) Camry; Then the consumer

would purchase the BMW. Do you agree with this analysis?

What might there be problems with this statement. Explain.

What else does a consumer consider and how is that

factored in the decision?

8.)

If the price for movie theater ticket prices went from

\$10 to \$12 and the demand for tickets fell from 200 / night

to only 160/night. What will be the price elasticity of

demand for tickets? Would you recommend that the theater raise prices again? Why?

9.)

If the price elasticity of SUPPLY for peaches is 0, then

what does mean about peaches? How will the price for the

peaches be set in the market?

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