Q1. Most restaurant customers tip according to a percentage rule between 15 and 25 percent of the bill. Diners who have dinner and a $20 bottle of wine usually pay the same percentage of the bottle price as diners who order a $100 bottle. Why, when the same efforts must be made to uncork and pour both bottles?
Q2. Starting with the estimated demand function for Chevrolets given in problem suppose the average value of the independent variables changes to N=225 million, I= 12,000, PF=10,000, Pg=100 cents, A=250,000, and p1=0(ie. The incentives are phased out)
(a) Find the equation of the new demand curve for Chevrolets.
(b) if Pc is 10,000, find the value of Qc?