Introductory Micreconomics Help!!!

[Deleted User]

For Homework 3 question 6, does anyone know how to do it?

There are four consumers willing to pay the following amounts for a massage:
Sam $28
Cindy $8
Susan $32
Joan $20

There are four masseurs with the following opportunity costs of supply:
John $12
Fred $24
Chan $16
Charles $8

Each masseur has the capacity to produce only one massage.

How many massages should be given to maximise efficiency? What is the maximum possible total surplus?

Thank you in advance.

[sadboy222]

hey dude i dont have the answer but can you help me out.

for question 2 how do you calculate it? do you have to work out the % ?

[Deleted User]

% change in quantity demanded divided by % change in price.
So for Al, [(50-70)/70]/[(10-5)/5] = -0.29.

[ferrsal]

% change in quantity demanded divided by % change in price.
So for Al, [(50-70)/70]/[(10-5)/5] = -0.29.

Isn't it

-20/5 x 15/120 = -0.5?

You may be right, but I'm just following the lecture notes formula...

[REBORN]

I also got -0.5.

[monkeywantsabanana]

% change in quantity demanded divided by % change in price.
So for Al, [(50-70)/70]/[(10-5)/5] = -0.29.

I also got -0.29. I did it your way... though lecture notes lead me to a different answer. :-S

[ferrsal]

Anybody figured out question 6? Still kinda confused about it.

Also, with the MC exam thing starting on Monday, how much does it contribute to our overall grade?

[monkeywantsabanana]

Also, with the MC exam thing starting on Monday, how much does it contribute to our overall grade?

5%

[sadboy222]

im struggling with these questions how do oyu do 2b)

3ab)

4

[ferrsal]

im struggling with these questions how do oyu do 2b)

3ab)

4

2b)

To find income elasticity of demand: ΔQ/ΔI x ΣI/ΣQ
ΔQ = change in quantity (in this case referring to change in the quantity she will buy at $20 (this number is stated in Q) because her income is now the same as Fiona's)
     = 20 - 30 = -10
ΔI = change in income
    = 12,500 - 7,500
    = 5,000
ΣI = sum of previous and new income
    = 12,500 + 7,500
    = 20,000
ΣQ = sum of quantity she would have bought with her old income + her new income (at $20)
     = 20 + 30
     = 50

therefore -10/5000 x 20000/50 = 0.8

3a)
when p = 5, Q = 150,000
when p = 10, Q = 100,000

Price elasticity = -50000/5 x 15/250000 = -0.6

0.6<1, therefore inelastic

(btw the price elasticity formula is in the lecture notes)

b) when p = 10, Q = 100,000
when p = 15, Q = 50,000

Price elasticity = -50000/5 x 25/150000 = -1.6

1.6>1, therefore elastic

havent done 4 yet... Also sorry if these are wrong... I'm trying to help out but I may be way off 

[Deleted User]

Isn't it

-20/5 x 15/120 = -0.5?

You may be right, but I'm just following the lecture notes formula...

What's the formula? Sorry, I don't attend the lectures.

[ferrsal]

Price elasticity of demand = ΔQ/ΔP x ΣP/ΣQ

ΔQ - change in quantity
ΔP - change in price
ΣP - sum of both prices
ΣQ - sum of both quantities

[Fluttershy]

For Homework 3 question 6, does anyone know how to do it?

There are four consumers willing to pay the following amounts for a massage:
Sam $28
Cindy $8
Susan $32
Joan $20

There are four masseurs with the following opportunity costs of supply:
John $12
Fred $24
Chan $16
Charles $8

Each masseur has the capacity to produce only one massage.

How many massages should be given to maximise efficiency? What is the maximum possible total surplus?

Thank you in advance.

Susan gets massaged by Charles, Sam gets massaged by John, Joan gets massaged by Chan, total surplus is $44. I think you try to match up the customers with the highest payments with the masseurs with the lowest opportunity costs; as you would make a loss if Fred were to massage Cindy, she doesn't get a massage.

DISCLAIMER: I think.

[ferrsal]

Currently trying to dodge the MC exam until tomorrow.....

[Deleted User]

It's only worth 5%, which is basically nothing.