Juan and Therese each own a Taco restaurant in the town of Burritoville. The town is3km long. Juan is located 1km along the town, and Therese is at 3km along (see thefigure below). 300 Consumers are uniformly located along the town (between 0 and 3).Consumer i’s utility derived from dining at restaurant j is given byui j = u − t|xi − y j| − p j,where j = 1, 2 indicate the two restaurants, t is the per unit cost of travelling along thetown, xi is the location of consumer i, y j is the location of restaurant j, and p j is theprice of restaurant j. Each consumer eats a meal at exactly one restaurant. Restaurantscompete with each other by simultaneously choosing prices. Each restaurant has constantmarginal costs of c and no fixed costs.

At Tex's Taco Truck, a basic taco costs $3 and comes with just lettuce and tomato. Other toppings can be added for $1 each.Let t represent the number of toppings added and c represent the total cost in dollars.This relationship can also be shown in a table. Complete the equation that represents the relationship between t and c.t c7 108 119 1210 13

Mary (consumer 1) and Lucy (consumer 2) are the only two consumers in the economy.Each of them consumes only two goods, fish (good x) and chips (good y), which they also own.Consumer 1’s utility function is given byU 1(x, y) = x2y3She has 25 units of x and 5 units of y. Consumer 2’s utility function is given byU 2(x, y) = ln x + ln y.She has 6 units of x and 20 units of y. Let p be the price of x and normalise the price of y to 1.(a) Draw the Edgeworth Box of this economy, marking clearly the endowment point. For eachconsumer, sketch the indifference curve passing through the endowment point.(b) Calculate the marginal rate of substitution for each consumer at the endowment point.(c) Who is going to sell x and buy y? Why?(d) Find the demand of consumer 1 for x—denote it as x1—and the demand of consumer 1for y—denote it as y1.(e) Find the demand of consumer 2 for x—denote it as x2—and the demand of consumer 2for y—denote it as y2.(f) Find the equilibrium price of good x.(g) Find the equilibrium consumption bundle of each consumer.(h) Mark your answer to part (g) in the Edgeworth Box you have drawn for part (a). Drawthe budget line under the equilibrium price. For each consumer, draw the indifferencecurve passing through the equilibrium consumption bundle.1

Cloe enjoys eating burritos. Her total benefit for different amounts of burritos are set out in the table below.Quantity Total Benefit1 $202 $393 $574 $745 $906 $1057 $1198 $1329 $14410 $155 If the price is $11, how many burritos Cloe will buy if she is a utility maximiser?

Cloe enjoys eating burritos. Her total benefit for different amounts of burritos are set out in the table below.Quantity Total Benefit1 $202 $393 $574 $745 $906 $1057 $1198 $1329 $14410 $155 If the price is $17, how many burritos Cloe will buy if she is a utility maximiser?

Betty runs a burger joint for tourists, kilometres from the nearest town. She has a monopoly and faces the demand schedule as shown in Table 1 for burgers. Assume Betty’s average cost and marginal cost are constant at $2 a meal. Table 1 – Betty’s Burgers - Demand Schedule Quantity demanded (burgers per week): 160, 140, 120, 100, 80, 60, 40, 20, 0 Price = AR ($): 1, 2, 3, 4, 5, 6, 7, 8, 9 TR ($): 160, 280, 360, 400, 400, 360, 280, 160, 0 MR: 0, 1.2, 0.8, 0.4, 0, -0.4, -0.8, -1.2, -1.6 MC: 2, 2, 2, 2, 2, 2, 2, 2, 2 TC: 320, 280, 240, 200, 160, 120, 80, 40, 0 Profit: -160, 0, 120, 200, 240, 240, 200, 120, 0 b) What is the range for the profit maximising monopoly price and between how many burgers will Betty sell a week? Why?