1. Consider a pure exchange economy with two goods, 1 and 2, and two consumers, A and B, who have utilities and u¹(x₁, x₂) = min{1, 2} u³(x₁, x2) = x³x2. Recall that the Marshallian demands corresponding to these utility functions are, respectively, x^(p, w): W W
Q: Expansionary fiscal policy is so named because it: involves an expansion of the nation's money…
A: Expansionary fiscal policy:- As the name suggest , it is used to expand the economy. The…
Q: Q1. Calculate EOQ and plot a graph with the following information. Annual Usage= 1600 units Holding…
A: Economic order quantity (EOQ) refers to a type of policy on inventory that calculates the order…
Q: IS Landia production possibilities: A B 8 Fish 6 4 2 Chips 0 10 20 30 Fish Chips с Scandia…
A: Opportunity cost is the cost of producing one good in terms of other good. Opportunity cost is…
Q: If the annual inflation rate is 10% and the annual real interest rate is 20%, what is the annual…
A: Real interest rate is the rate of interest free of inflation. Inflation is the increase in price…
Q: Landia production possibilities: A B Fish 8 6 Chips 0 10 B) 4 chips. C) 3 chips. D) 1 chip. Fish…
A: Opportunity cost is the cost of producing one good in terms of other good. Opportunity cost is…
Q: The intention of deregulating markets such as air passenger transport in the late 1980s and early…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: QUESTION SEVEN Given the revenue function R(x) = √x²+5 a. Find the approximate marginal revenue…
A: Marginal revenue is defined as the the increase in revenue which is resulting from selling one…
Q: Which of these is a valid difference between firms in competitive price-searcher and price-taker…
A: A market is a place where buyers and sellers interact to trade their products and services. The…
Q: A (single-price) monopolist is maximizing profits when A. the marginal revenue associated with the…
A: Monopoly is the term used to describe a market system in which there is only one seller on the…
Q: New Zealand dollar drops to lowest value against US dollar since 2020 (27/09/2022) The New Zealand…
A: CPI (Consumer Price Index) is a measure of inflation. It measures the change in prices of a basket…
Q: F. Highgarden was the seat of House Tyrell and is the regional capital of the Reach, which is the…
A: Total cost is the amount of expenditure occurred on the production of goods and services. The…
Q: 12. The figure shows Edwyn’s labor supply curve. Consider a wage increase from $5 to $6. For Edwyn,…
A: Edwyn’s labor supply curve is upward sloping curve for some range of wage and downward sloping for…
Q: if two groups have the same price elasticity of demand, third-degree price discrimination(i.e.…
A: Price discrimination is a marketing tactic employed by monopoly businesses in which they charge…
Q: Continued monetary tightening 05 October 2022 The Monetary Policy Committee today increased the…
A: To find the impact of monetary policy tightening by other central banks on the growth of New Zealand…
Q: 1.1. The following mathematical equations reflect the performance of the economy and inventory…
A: The Keynesian model of national income is the sum of the consumption function, investment function,…
Q: 1.10 Read the following extract and answer questions 1.10 and 1.11. "South Africa has banned Bain &…
A: Failure of the open market to effectively distribute goods and services is what we mean when we talk…
Q: Connect Problem 13-11 An economy is described as follows: C = 400+ 0.6 (Y - T) IP = 200- G= 200 NX =…
A: Aggregate expenditure: aggregate expenditure is the sum of consumption expenditure, investment…
Q: B. Albert works for a construction company. He has 70 hours a week available to divide between…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: How to pay for Universal Basic Income/Basic Income Guarantee, through MMT approach?
A: A proposed government guarantee of a monthly payment to every citizen is known as universal basic…
Q: Does the recognition of depreciation expense affect cash flows? Why or why not?
A: Cash flow represents all the money transactions that occur from the trade cycle for a given period.…
Q: 1.(a). Calculate the point "motorboat" price elasticity of demand when Py = $10000. Use Qs…
A: Price elasticity measures the change in quantity due to change in price. Income elasticity…
Q: What is the cost borne to society at equilibrium at Point A?
A: In economics, economic equilibrium is a circumstance in which economic forces such as supply and…
Q: Consider a marriage market with three men and three women, all of whom prefer any match to being…
A: Given information
Q: Please help me with this questions wih explanantion.
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A utility company is considering the following plans to provide a certain service required by…
A: Future Worth provides the compounded values of the present cash flows . FW = ∑ Cash Flow (1+R)n
Q: 12 Study the following diagram and answer the question that follows. Expenditures (billions of…
A: Consumption function is consists of autonomous consumption and consumption dependent on Income. C…
Q: Consider the interval of random numbers presented below. The following random numbers have been…
A: Given:- Random numbers i.e 99,98,26,32,49,52,33,02,09,17 Arrival time=10 hours To calculate:-…
Q: 9. Suppose Warner Music and Universal Music are in a duopoly and currently limit themselves to 10…
A: The study of strategic interactions and mathematical models is done in game theory. A dominant…
Q: For this question, assume that indifference curves are strictly convex, consumption and leisure are…
A: Worker has to decide between the work and leisure. A rise in wage affects such selection of worker.…
Q: The biggest problem with constructing the CPI is that the basket of goods that the typical consumer…
A: The full form of CPI is consumer price index. Consumer price index means the percentage change in…
Q: Two labor-leisure choice diagrams are shown below. In both cases, the labor-leisure choice diagrams…
A: Neoclassical model of labor-leisure choice is the terminology used to describe the framework that…
Q: Advocate the benefits of using monetary policy to control the economy.
A: A change in the money supply is known as monetary policy. By keeping an eye on price changes and…
Q: If the MPC in an economy is .8, government could shift the aggregate demand curve rightward by $100…
A: The MPC calculates the income percentage which is used to purchase goods and services rather than…
Q: 1. Collusion is an anticompetitive practice that could fall under the criminal code according to the…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: roblems 6-9 are based on the model of demand and supply for coffee as shown in Figure 3.10 Changes…
A: The equilibrium price is the only price where the plans of customers and the plans of producers meet…
Q: Calculate the approximate price relatives to two decimal places for the MTN and Vodacom stocks over…
A: Stock Po qo P1 q1 Poqo Poq1 P1q0 2008 2008 2011 2011 mtn 285 370 215 480 Vodacom…
Q: How will each of the following scenarios impact the market for money The central bank increases the…
A: The interest rate that commercial banks and other financial institutions pay to borrow short-term…
Q: Suppose the government wants to reduce the total pollution emitted by three local firms. Currently,…
A: Given, Firm Cost of Eliminating the First Unit of Pollution (Dollars) Cost of Eliminating the…
Q: The marginal revenue for a price searcher is: more than total revenue. less than the level of…
A: A price searcher firm faces a downward-sloping demand curve. Since the demand curve is downward…
Q: Parliament is interested in financing the cost of their proposed childcare programme by imposing a…
A: The main concern that payroll taxes imposed to pay for childcare programmes will be entirely burden…
Q: 4. A machine was purchased under these terms: P 30,000 down and P 5,000 each month for 5 years. If…
A: The future is the main concern in an analysis of present worth. Values from earlier times are not…
Q: The table below shows cash flow estimates for a project. The B/C ratio for the following cash flow…
A: The benefit-cost ratio is calculated as B/C ratio= PW of Benefits-PW of disbenefitsFC+PW of M&O…
Q: Initial values are: PX = $9500 PY = $10000 I = $15000 A = $170000 W = 160 This…
A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…
Q: Assume the following about a manufacturing plant: • Typical monthly output = 100 ● Typical monthly…
A: The fixed cost is the cost which does not depend on quantity of output produced and it remain the…
Q: How will each of the following scenarios impact the market for money The central bank conducts an…
A: Money market equilibrium is where the money demand curve intersects the money supply curve.…
Q: The Delta firm intends to buy a device called machine X. Machine X would cost $25,000 and have…
A: A payout may also refer to the period of time it takes for a project or venture to recoup its…
Q: Given the following information,when price is 100ksh the quantity supplied is 45units and when the…
A: The Law of supply states the positive relationship between price and quantity supplied, keeping…
Q: Provide the notation for the subgame perfect outcome of the game described in question 2. Subgame…
A: Imperfect Information Game is defined as a game where the information regarding the game is hidden…
Q: Explain the following: Neutral fiscal policy, Built in Stabilizer
A: Fiscal neutrality states that fiscal policies by government such as taxing, expenditure, or…
please only do: if you can teach explain each part
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 3 Consider a pure exchange economy with 2 consumers and 2 goods. Consumer ? owns 8 units of good 1 and 1 unit of good 2, and his preference is represented by the following utility function: uA(x1, x2) = x1*x2. Consumer ? owns 2 units of good 1 and 4 units of good 2, and his preference is represented by the following utility function: uB(x1,x2)=x1+x2. Assume that the two consumers are allowed and able to trade with each other, and that good 1 is the numeraire. In this case, both consumers act as price-takers. Price takers: a market participant that is not able to dictate the prices in a market. Therefore, a price taker must accept the prevailing market price. Please find the competitive equilibrium of this pure exchange economy.5 Three Goods Consider a pure exchange economy with three goods: x1, x2 and x3. Consumer A’s utility function is U A = min {x1, x2}. He starts with one unit of x1 and none of the other goods. Consumer B’s utility function is U B = min {x2, x3}. He starts with one unit of x2 and none of the other goods. Consumer C’s utility function is U C = min {x1, x3}. He starts with one unit of x3 and none of the other goods. Find the general equilibrium prices and allocationConsider a simple economy consisting of two countries, England and France. England has 25 workers and France has 75 workers. England can produce 4 units of grain and 2 units of cloth with each unit of labor. France can produce 1 unit of grain and 1 unit of cloth with each unit of labor. Wages per unit of labor are the same in both countries. c. Assume that consumers have utility ?=?????^(1/2) ⋅????ℎ^(1/2). How much does each country produce and consume of each good in autarky? Show the consumption graphically by drawing the indifference curves into your two diagrams. d. Now allow for trade. How much does each country produce and consume of each good in this case? Draw the new production possibilities frontier, indifference curves, and equilibrium point into your two diagrams, and indicate exports and imports. e. What is the utility of consumers in each country under free trade? How much does utility change relative to autarky?
- Q. 4 Two consumers, A and B, live in a pure exchange economy with two good, x and y. Consumer A is endowed with 0 unit of x, 14 units of y; Consumer B is endowed with 4 unit of x, 6 units of y. They both have the utility function U=x1/4y3/4. What will be consumer A’s consumption of good X?Options: 1. A) Yes, you can still afford the bundle at your previous consumer equilibrium B) No, you now cannot afford the bundle at your previous consumer equilibrium C) It is uncertain whether or not you can still afford the bundle at your previous consumer equilibrium 2. A) For each peck of apples, you will buy 1/3 pounds of oranges B)For each peck of apples, you will buy 1 pounds of oranges C)For each peck of apples, you will buy 3 pounds of oranges D) For each peck of apples, you will buy 6 pounds of orangesConsider the utility functions below of two individuals, A and B, and bundles of goods Q and R. UA=X0.5Y0.5; UB=X+2Y; Bundle Q (10, 10); Bundle R (10, 15). Suppose the total X and total Y available in the economy are both equal to 20. a. If initially both individuals are consuming bundle Q, then a pareto-improvement is possible through reallocation of goods, i.e. individual A gives B some of his good X in exchange for some of individual B’s good Y. (True or False? Explain through mathematical examples).b. Pareto-optimality is achieved if we give individual B Bundle R and the remaining goods X and Y available in the economy is given to individual A. (True or false? Explain through a graphical example)
- Consider a two-person exchange economy in which person 1 owns 200 units of x and 100 units of y while person 2 owns 100 units of x and 200 units y. Suppose their preferences over the two goods can be represented as: U1 (x, y) = y + 50Inx U2 (x, y) = y + 150lnx 1. How much of x do they trade among each other? 2. Does the First Welfare Theorem (FWT) hold in this economy?Consider an economy composed of 16 consumers. Of these, 5 consumers each own one right shoe and 11 consumers each own one left shoe. Shoes are indivisible. Everyone has the same utility function, which is Min(2R, L}, where R and L are, respectively, the quantities of right and left shoes con sumed. A) (10%) Is the status quo (where each individual has his own shoe) Pareto efficient? If so, briefly explain why. If not, provide a Pareto improvement b) (10%) Characterize all Pareto efficient allocationsSuppose countries A and B produce and consume (assuming convex preferences) apples and bananas using only labour. Unit labour cost for apples in country A are 1 and 2 in country B. Unit labour cost for bananas are 2 in country A and 5 in country B. The labour force is the same in both countries, and given by 100 in each country. Which three of the following statements are true? A Country B has a comparative advantage in producing bananas. B Allowing for international trade, the production of 50 apples and 50 bananas can occur in a global market equilibrium feasible, but not in market equilibria under autarky. C Each country has an absolute advantage. D Allowing for international trade, the production of 50 apples and 50 bananas is feasible, but not under autarky. E Under autarky, the relative price for apples (price for apples/price for banans) equals 0.5 in country A and 0.4 in country B. F Country A will produce bananas, with or…
- I need help with this question in my homework. Suppose a consumer’s utility function is given by U(X,Y) = MIN (5X, Y). Also, the consumer has $60 to spend, and the price of good X is P(x) = $5. Let good Y be a composite good (good Y is the “numeraire”) whose price is P(y) = $1. So, on the Y-axis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X. What is the Indirect Utility Function? What is the Expenditure Function?Tia and Lia consume bread (R) and clothes (B) with the following utility functions: Tia : UT = 30 R0.25 B0.75Lia : UL = 50 R0.5 B0.5 It is known that the price of bread (Pbread) is Rp. 100,000 while the price of clothes (Pclothes) is Rp. 300,000 If Tia currently consumes 5 pieces of bread and 10 clothes, while Lia consumes 12 pieces of bread and 18 clothes, specify: a. Have Tia and Lia reached an efficient allocation level? Use calculations and the Edgeworth Box to help your explanation. b. If it turns out that the level of consumption is not efficient, what is the consumption of each to reach the Paretto Optimum? Use calculations and the Edgeworth Box to help your explanation.Consider a two-city (A and B) regional economy where each city operates on the negatively sloped portion of its utility curve. In the initial equilibrium, the two cities are identical. Then air pollution (lead emissions) in city B decreases the brain power and productivity of workers in the city by 20 percent. Illustrate the effects of lead emissions on the regional equilibrium, indicating the direction of changes in city size (the number of workers) and regional utility.