Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
Solution manual
a
edition
a
Microeconomics 6th edition a a
by besanko and braeutigam
a a a
all chapters 1-16a a
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 1
, Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
a
edition
TABLE aOF
aCONTENT
Part a1: aIntroduction ato aMicroeconomics
Chapter a1. aAnalysing aEconomic aProblems
a Chapter a2. aDemand aand aSupply aAnalysis
Part a2: aConsumer aTheory
Chapter a3. aConsumer aPreferences aand athe aConcept aof aUtility
a Chapter a4. aConsumer aChoice
Chapter a5. aThe aTheory aof aDemand
Part a3: aProduction aand aCost aTheory
Chapter a6. aInputs aand aProduction aFunctions
a Chapter a7. aCosts aand aCost aMinimisation
a Chapter a8. aCost aCurves
Part a4: aPerfect aCompetition
Chapter a9. aPerfectly aCompetitive aMarkets
a Chapter a10. aCompetitive aMarks: aApplications
Part a5: aMarket aPower
Chapter a11. aMonopoly aand aMonopsony
a Chapter a12. aCapturing aSurplus
Part a6: aImperfect aCompetition aand aStrategic aBehaviour
Chapter a13. aMarket aStructure aand aCompetition
a Chapter a14. aGame aTheory aand aStrategic
aBehaviours
Part a7: aSpecial aTopics
Chapter a15. aRisk aand aInformation
a Chapter a16. aGeneral aEquilibrium
aTheory
Chapter a17. aExternalities aand aPublic aGoods
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 2
,Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
Chapter 1
a
edition
a
Analyzing Economic Problems a a
SolutionstoReviewQuestions
a a a
1. What ais athe adifference abetween amicroeconomics aand amacroeconomics?
Microeconomics astudies athe aeconomic abehavior aof aindividual aeconomic adecision
amakers, a such aas a a aconsumer, aa aworker, aa afirm, aor aa amanager.
a Macroeconomics astudies ahow aan a entire anational a economy aperforms, aexamining
asuch atopics aas athe aaggregate alevels aof a income aand aemployment, a the alevels aof
ainterest arates aand aprices, athe arate aof ainflation, a and athe anature aof abusiness acycles.
2. Why ais aeconomics aoften adescribed aas athe ascience aof aconstrained
achoice?
While aour awants afor agoods aand aservices aare aunlimited, athe aresources anecessary ato
a produce athose a goods aand aservices, asuch aas alabor, amanagerial atalent, acapital, aand
araw a materials, aare a“scarce” a because atheir asupply ais alimited. a This ascarcity aimplies
athat a we aare a constrained ain athe achoices awe a can amake aabout awhich agoods aand
aservices ato aproduce.
Thus, aeconomics ais aoften adescribed aas athe a science aof aconstrained achoice.
3. How adoes athe atool aof aconstrained aoptimization ahelp adecision
amakers a make achoices? a What aroles ado athe aobjective afunction aand
aconstraints aplay ain a a amodel aof aconstrained a optimization?
Constrained aoptimization aallows athe adecision amaker ato aselect athe abest a(optimal)
a alternative awhile a accounting afor aany apossible alimitations aor arestrictions aon athe
achoices. a The aobjective afunction a represents athe arelationship ato abe amaximized aor
aminimized. a For a example, aa afirm’s aprofit amight abe a the aobjective afunction aand
aall achoices awill abe a evaluated ain athe aprofit a function ato adetermine awhich a yields athe
ahighest aprofit. a The a constraints aplace alimitations aon athe achoice athe adecision
amaker acan a a select aand adefines a the aset aof aalternatives afrom awhich athe abest awill
abe achosen.
4. Suppose athe amarket afor awheat ais acompetitive, awith aan aupward-
sloping a supply acurve, a a adownward-sloping ademand acurve, aand aan
aequilibrium aprice a of a$4.00 aper abushel. aWhy a would aa ahigher aprice a(e.g.,
a$5.00 aper abushel) anot a be aan aequilibrium aprice? aWhy awould aa a lower
aprice a(e.g., a$2.50 aper abushel) a not abe aan aequilibrium aprice?
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 3
, Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
a
edition
If athe aprice ain athe amarket awas aabove athe aequilibrium aprice, aconsumers awould abe awilling
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 4
Solution manual
a
edition
a
Microeconomics 6th edition a a
by besanko and braeutigam
a a a
all chapters 1-16a a
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 1
, Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
a
edition
TABLE aOF
aCONTENT
Part a1: aIntroduction ato aMicroeconomics
Chapter a1. aAnalysing aEconomic aProblems
a Chapter a2. aDemand aand aSupply aAnalysis
Part a2: aConsumer aTheory
Chapter a3. aConsumer aPreferences aand athe aConcept aof aUtility
a Chapter a4. aConsumer aChoice
Chapter a5. aThe aTheory aof aDemand
Part a3: aProduction aand aCost aTheory
Chapter a6. aInputs aand aProduction aFunctions
a Chapter a7. aCosts aand aCost aMinimisation
a Chapter a8. aCost aCurves
Part a4: aPerfect aCompetition
Chapter a9. aPerfectly aCompetitive aMarkets
a Chapter a10. aCompetitive aMarks: aApplications
Part a5: aMarket aPower
Chapter a11. aMonopoly aand aMonopsony
a Chapter a12. aCapturing aSurplus
Part a6: aImperfect aCompetition aand aStrategic aBehaviour
Chapter a13. aMarket aStructure aand aCompetition
a Chapter a14. aGame aTheory aand aStrategic
aBehaviours
Part a7: aSpecial aTopics
Chapter a15. aRisk aand aInformation
a Chapter a16. aGeneral aEquilibrium
aTheory
Chapter a17. aExternalities aand aPublic aGoods
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 2
,Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
Chapter 1
a
edition
a
Analyzing Economic Problems a a
SolutionstoReviewQuestions
a a a
1. What ais athe adifference abetween amicroeconomics aand amacroeconomics?
Microeconomics astudies athe aeconomic abehavior aof aindividual aeconomic adecision
amakers, a such aas a a aconsumer, aa aworker, aa afirm, aor aa amanager.
a Macroeconomics astudies ahow aan a entire anational a economy aperforms, aexamining
asuch atopics aas athe aaggregate alevels aof a income aand aemployment, a the alevels aof
ainterest arates aand aprices, athe arate aof ainflation, a and athe anature aof abusiness acycles.
2. Why ais aeconomics aoften adescribed aas athe ascience aof aconstrained
achoice?
While aour awants afor agoods aand aservices aare aunlimited, athe aresources anecessary ato
a produce athose a goods aand aservices, asuch aas alabor, amanagerial atalent, acapital, aand
araw a materials, aare a“scarce” a because atheir asupply ais alimited. a This ascarcity aimplies
athat a we aare a constrained ain athe achoices awe a can amake aabout awhich agoods aand
aservices ato aproduce.
Thus, aeconomics ais aoften adescribed aas athe a science aof aconstrained achoice.
3. How adoes athe atool aof aconstrained aoptimization ahelp adecision
amakers a make achoices? a What aroles ado athe aobjective afunction aand
aconstraints aplay ain a a amodel aof aconstrained a optimization?
Constrained aoptimization aallows athe adecision amaker ato aselect athe abest a(optimal)
a alternative awhile a accounting afor aany apossible alimitations aor arestrictions aon athe
achoices. a The aobjective afunction a represents athe arelationship ato abe amaximized aor
aminimized. a For a example, aa afirm’s aprofit amight abe a the aobjective afunction aand
aall achoices awill abe a evaluated ain athe aprofit a function ato adetermine awhich a yields athe
ahighest aprofit. a The a constraints aplace alimitations aon athe achoice athe adecision
amaker acan a a select aand adefines a the aset aof aalternatives afrom awhich athe abest awill
abe achosen.
4. Suppose athe amarket afor awheat ais acompetitive, awith aan aupward-
sloping a supply acurve, a a adownward-sloping ademand acurve, aand aan
aequilibrium aprice a of a$4.00 aper abushel. aWhy a would aa ahigher aprice a(e.g.,
a$5.00 aper abushel) anot a be aan aequilibrium aprice? aWhy awould aa a lower
aprice a(e.g., a$2.50 aper abushel) a not abe aan aequilibrium aprice?
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 3
, Besanko a& aBraeutigam a– aMicroeconomics, a5th Solutions aManual
a
edition
If athe aprice ain athe amarket awas aabove athe aequilibrium aprice, aconsumers awould abe awilling
Copyright a© a2014 aJohn aWiley a& aSons, Chapter a1 a- a
aInc. 4
