3. Assume an individual can either work making S6 per hour in the college bookst
ID: 1142093 • Letter: 3
Question
3. Assume an individual can either work making S6 per hour in the college bookstore, or can open a fruit stand and sell fruit as an entrepreneur according to the following table. Hours Selling Fruit Quantity of Fruit Sold 20 38 54 68 78 96 If an individual desired the highest possible income, how should hours be allocated be- tween working in the bookstore, and being a fruit entrepreneur if each piece of fruit sold for $.50? Why? 4. Refer back to #3. Suppose the nnarket demand for fruit was QD 70.5-P. If this individual decided to become a fruit entrepreneur and supply some fruit to them market compute the Consumer and Producer Surplus. What is this market worth to society? What can you conclude about the benefits of entrepreneurship to society? Hint: Your solution in #3 for the choice of how many hours to spend producing "fruit" is the supply of fruit in the market.Explanation / Answer
1)
1) Solution: 4 hours selling fruit; 4 hours working at bookstore of college
Working:
Hours selling fruit
Q fruit sold
Additional amount earned
Income
1
20
20
10
2
38
18
9
3
54
16
8
4
68
14
7
5
78
10
5
6
88
10
5
7
96
8
4
8
99
3
1.5
Selling fruit for the first 4 hours is more than the income from the alternative ($6), thus you will spend 4 hours selling fruit and 4 hours working at bookstore of college
Hours selling fruit
Q fruit sold
Additional amount earned
Income
1
20
20
10
2
38
18
9
3
54
16
8
4
68
14
7
5
78
10
5
6
88
10
5
7
96
8
4
8
99
3
1.5
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