1. Week 4 Managerial Economics

2. Order of Business Homework Assigned Lectures Other Material Lectures for Next Week

3. Homework

4. Pashigian, p 86, Exercise 2-2

6. Years to calculate 

7. Bias due to changes in preferences

8. Complements or Substitutes

9. Price elasticity of Y; no year

10. Suppose the demand function for a product is Q = 150 - 12p. Compute the point elasticity of demand at Q = 30. Then compute the arc price elasticity of demand over the interval Q= 40 to Q = 30; over the interval Q = 31 to Q = 30; over the interval Q = 30.1 to Q = 30. Comment on the pattern of these price elasticities.

13. Explain whether you agree or disagree with the following statement: An economist would classify a new automobile that does not start in cold weather as an inferior good. (Apologies for giving this question given the recent weather, but it IS a good question).

14. Does the quantity demanded increase or decrease with income?

15. Suppose the demand function for a product is Q = 150 - 12p. The good is currently selling for $5. Compute consumer surplus. Then compute the deadweight loss if the government imposes a tax of $2 on each unit sold.

16. Q=150-12P $5 90

17. Q=150-12P $5 90 $12.5 7.5 90

18. Q=150-12P $5 90 $12.5 7.5 90

19. Q=150-12P $5 $90 $12.5 7.5 90

20. Q=150-12P $5 90 $12.5 $7 66

21. Q=150-12P $5 90 $12.5 $7 66 DWL=$24

22. A consumer does not subscribe to satellite TV, and lives in an area where there is no cable TV. Describe in words the shape of his indifference curves between satellite TV and other goods. Tell me what you can tell about their shape?

23. OG S He gets more utility from doing without satellite TV than he would with.

24. Lectures for this Week The Economics of Bads The Value of Time Consumer Surplus Applying Consumer Surplus Consumer Surplus and Deadweight Loss More on Consumer Surplus

25. The Economics of Bads

26. The Value of Time

27. Consumer Surplus

28. Applying Consumer Surplus

29. Consumer Surplus and Deadweight Loss

30. More on Consumer Surplus

31. Lectures for Next Week Consumer Surplus and Indifference Curves Priceline and E-Bay Compensated Demand Curves Income and Substitution Effects Uncertainty Uncertainty and Risky Behavior Buying Insurance A Numerical Problem Who Robbed C.C.

32. Consumer Surplus and Indifference Curves

33. Priceline and E- Bay

34. Compensated Demand Curves

35. Income and Substitution Effects

36. Uncertainty

37. Uncertainty and Risky Behavior

38. Buying Insurance

39. A Numerical Problem

40. Who Robbed C. C.