12 JI John is trying to decide how to divide his time between his job as a stock
ID: 1136285 • Letter: 1
Question
12 JI John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the table below: Hours Per Total Number Day Cleaniof Windows Windows Cleaned 0 16 17 What is the lowest price per window that John would be willing to accept to spend 4 hours per day cleaning windows? O $11 O $3.50 O $2Explanation / Answer
1.The lowest price that John would be willing to accept is $7 for cleaning 1 window.This is because $7 is his reservation price(least price that he is willing to accept).
Anseer-$7
2.Conditon for utility maximization:
MU1/MU2=P1/P2
Answer-second utilities
3.Maximize utility
4.Price of wheat
Because price of wheat is determined within the model.All the other factors are ceteris paribas so those are determined outside the model(exogenous).
5.A sellers supply curve shows how much he is willing to produce at what price or what is the opportunity cost of producing an additional amount of quantity.
Answer-last option
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