Telephone plan
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9) Your telephone plan charges you $25 per month plus 10 cents per minute for long distance calls. Write an equation that describes your monthly telephone account. What will you pay if you make 32 minutes worth of calls in a months? How much will you owe for a month if you make 45 minutes of long distance calls? Show the information on a graph.
10) What is a price floor? Show graphically, the effect of a price floor on a market.
11) What happens when government imposes a national minimum wage?
12) What will happen to the equilibrium price and quantity of apples if apples are discovered to prevent colds and fungus kills 10% of existing apple trees? Illustrate your answer.
13) GPA sells students parking permits, allowing them to park on campus, in student car park areas. Students complain about the relatively high cost of these permits, yet what really annoys them is that having paid for their parking permits, empty parking spaces are very hard to find during peak lecture times. Many students end up parking pff campus, and where they have to pay again, or walk a long distance. Assuming the university is unable to build new parking facilities on campus due to insufficient space, what recommendation might you make to remedy the problem of students with permits being unable to find places to work on campus?
How would you put in summary about a couple of paragraph the concept of the costs and supply and perfect competition and pure monopoly.
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Solution Summary
The price of floor for a telephone account is described. The equilibrium price and quantity of apples if apples are discovered to prevent colds and fungus kills.
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9) Your telephone plan charges you $25 per month plus 10cents per minute for long distance calls. Write an equation that describes your monthly telephone account. What will you pay if you make 32 minutes worth of calls in a month? How much will you owe for a month if you make 45 minutes of long distance calls? Show the information on a graph.
Solution: Let P be the monthly telephone account and Q be the number minutes of phone calls.
Then P = 25 + 0.10Q
When Q = 32, P = 25 + 0.10*32 = 25 + 3.2 = $28.20
When Q = 45, P = 25 + 0.10*45 = 25 + 4.5 = $29.50
10) What is a price floor? Show graphically, the effect of a price floor on a market.
Solution: Price floor is the lowest price allowed for sale of a good in the market. An example in Australia is award wages (minimum wages allowed). This involves the labour market. Here people supply labour for wages. Firms hire (demand) workers for those wages.
P
Supply (workers
award wage
Surplus Demand (firms)
Qd Qs Q
For the award wage to have an impact, it must be above the market equilibrium wage. In this case, there is an excess supply of workers, which translates into unemployment. Workers must ...
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