4. Gob has a utility function over consumption (C) and leisure (L). U=C(L-8). His budget constrain is given by 200(50-L)+1600-C=0. Write out the optimality condition for utility maximization (aka first order condition).
Q: True or false? In a 2-person economy, if the endowment is on the contract curve, there exists no exc...
A: To find : Whether the statement is true or false
Q: What policies did Deng Xiaoping take to bring China out of poverty to high growth? please give a de...
A: When consumer or producer product is manufactured, cost takes place and process of business follow ...
Q: A decrease in the German demand for American-made goods will Group of answer choices all...
A: Correct answer is "decrease the demand for dollars in the foreign exchange market."
Q: e following table describes the production possibilities of two cities in the country of Baseballia:...
A: The costs that depict the cost of the next best alternative being foregone for specified decisions a...
Q: Why could inflation be persistent in times of output gaps? Because of inflation expectations O a. O ...
A: In an economy, output gap refers to the situation when aggregate demand and aggregate supply are not...
Q: Calculate the missing information in the table Year Real GDP Nominal GDP GDP Deflator Prices of Nu...
A: GDP deflator = (Nominal GDP / Real GDP)*100 => Real GDP = (Nominal GDP / GDP deflator)*100 => ...
Q: Which of the following is an example of the real flow in the circular flow model of economics? A. A ...
A: The interaction and relationship between the households and the business is interpreted by the circu...
Q: Spain's current real GDP (YO) is €326 billion, and grows at a constant rate of 1.1%. Portugal's curr...
A: Given, Current real GDP of Spain= 326 billion GDP growth rate of Spain= 1.1% Cu...
Q: Why is the aggregate supply curve completely vertical in the long run? A. Short-run business cycles ...
A: Aggregate supply curve shows different combinations of price and output supplied in the economy.
Q: The economy is growing at a healthy rate. Nominal GDP is expected to grow by 4 percent this year. Ho...
A: Nominal GDP refers to the value of goods and services measured at current year prices.
Q: An increase in the income tax rate in an attempt to decrease a country's debt-to-GDP ratio may not b...
A: The debt-to-GDP ratio measures the proportion of a country's national debt to its gross domestic pro...
Q: 11500 11500 11500 11500 0 – 1–2–3– 4–5– 6 – 7–8 i = 3% F
A: Given interest rate = 3 % cashflows for year 3,4,5,6 = 11500 Future worth = cashflow * (1 + rate)^ye...
Q: I got a practice test question I dont understand in my economics class. 2. How would you show positi...
A: The aggregate supply curve shows that total quantities of goods and services are one to one directly...
Q: A man deposits P 1,000 at the end of each month for 3 years at a nominal rate of 12% compounded mont...
A: Given, Nominal rate of interest (r) = 12% compounded monthly For finding the effective interest ra...
Q: 5.) In the flow of funds model, households make cash payments in the cash payments in the market and...
A: Note:- Since we can only answer one question at a time, we'll answer first one. Please repost the qu...
Q: How will the age of the existing capital stock affect aggregate demand?
A: In Macroeconomics, the Aggregate Expenditure or Aggregate Demand is the sum total of four components...
Q: Ontario is removing vehicle license renewal fees (article below). How does this affect the cost of o...
A: Understanding the impact of eliminating licence renewal fees on automobile ownership costs is the go...
Q: 50 45 Profit or Loss 40 35 ATC 15 AVC 10 MC 5 4 10 12 14 16 18 20 QUANTITY (Thousands of sweaters) I...
A: In perfect competition, eqm quantity is found by the intersection of MC(marginal cost) and P(price) ...
Q: 3. Suppose that the nominal exchange rate of the dollar in terms of yen is ¥175/$. The price level i...
A: To solve above question let us consider two period (1& 2 ). In period 1 : Nominal Exchange rate ...
Q: The following diagram shows supply and demand in the market for laptops. Use the black point (plus s...
A: The markets are the place where the buyers of the products tend to interact with the sellers of thes...
Q: If firms and workers have adaptive expectations, what impact will contractionary monetary policy hav...
A: When talking about adaptive expectations, it is one of the approach of making future expectations of...
Q: Question 2 Which of the following predictions is not made by the supply and demand model?' a) If the...
A: Note:- “Since you have asked multiple question, we will solve the first question for you. If you wan...
Q: 1. The opportunity cost of the good is: a. greater during periods of raising prices b. equal to the ...
A: Opportunity cost Opportunity cost is the cost of next best foregone.The opportunity cost of a specif...
Q: 16) Suppose the total cost of producing T-shirts can be represented as TC = 50 + 2q, where q is outp...
A: Marginal cost refers to the change in total cost with respect to change in output. Variable cost is ...
Q: 230 -Budget Line --0-11 12 210 200 190 180 170 160 150 140 130 ho 100 90 60 50 40 30 10 10 15 20 Hou...
A: Maximum Units of consumption = Income/Price = wage*Hours worked/Price= 14*H/1 = 14H 225 = 14 H [...
Q: A firm earns economic profit when total profit exceeds
A: To find : When firm book profit
Q: Collective rights is a concept that prioritizes the welfare of society over: Group of answer cho...
A: Collective rights is held by a group of people rather than the individuals of the group. So it prio...
Q: What is the current price of a $1,000 discount bond that matures in 5 years if the yield to maturity...
A: As it is given in the question that Time n=5 YTMR = 5% current price =$1,000
Q: Suppose you are given the following information: Q s = 100 + 3P Now suppose that a tax is placed on ...
A: When taxes imposed on buyers the demand curve shifts to the left and the new quantity sold is less t...
Q: An online clothing retailer examined their transactional database to see if total yearly Purchases (...
A: As per the question, the least square regression model is given as: Purchase^=-33.8+0.019(income) "W...
Q: Question 38 According to expected utility theory, which of the following scenarios is the most desir...
A: Expected Value refers to the value of average of all outcomes in an experiment with the given probab...
Q: 13. Which of these statements regarding Consumer Price Index (CPI) are accurate? Select all that app...
A: A: True. CPI can be calculated for one industry by using a representative bundle in that industry fo...
Q: 3. A perfectly competitive individual firm operates in a constant cost industry and produces a level...
A: Answer: (c). ATC=TCqATC=12×q2+5,000qATC=12q+5,000qATC=q2+5,000q Graphical presentation of ATC and MC...
Q: 3.) Which of the following is NOT part of the opportunity cost of attending TCNJ? a.) Tuition b.) Ro...
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question s...
Q: substitution effect: Suppose the price of sausage doubles, the substitution effect will lead her to ...
A: Consumers choose the goods according to the price and their budget constraint, if the price of goods...
Q: Which of the following statements about productivity is not true? O A. It is not directly observable...
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any sp...
Q: A man deposits P 1,000 at the end of each month for 3 years at a nominal rate of 12% compounded mont...
A: Given nominal interest rate = 12 % compounded monthly Effective rate = (1 + 12%/12)^1*12 – 1 = 12.68...
Q: Assume that the demand for food is relatively inelastic and the demand for jewelry is relatively ela...
A: Answer: If the same tax is imposed on the goods having elastic and inelastic demand then the good wi...
Q: Which of the following will NOT shift the ADTI curve? O a. A rise in government spending O b. A rise...
A: AD: Y= C+I+G+NX Y = National Income or output C= Consumption I = Investment G = Government Spending ...
Q: Gabe purchases a $600 bond that has 6 remaining semi-annual 7% coupon payments for $510. What would ...
A: Semi-Annual: is an adjective that describes one thing that's paid, reported, published, or otherwise...
Q: In a perfectly competitive market, why can’t prices above the competitive equilibrium price prevail ...
A: Perfectly competitive market A Perfectly competitive market is one in which a large number of buyers...
Q: This question considers GDP in a country in a single year. Which of the following statements are cor...
A: GDP means gross domestic product which is a measurement of all the goods and services manufactured i...
Q: Which of the following statements is true? According to Okun's law: Select one or more: a. unemploym...
A: In general, Okun's law states that as unemployment decreases, a country's productivity rises.
Q: Consider the Cobb-Douglas production function y-AKO.3N0,7, where y is output, A is total factor prod...
A: Given that: Y = AK0.3N0.7 where Y is the OutputA is the Total Factor ProductivityK is the CapitalN i...
Q: 21.)Which of the four principles of indifference curves implies consumers prefer mixtures to extreme...
A: Answer 21) "Correct option is c)" because when indifference curves are convex/bowed in then they wil...
Q: 23. Economic profit is A. O Part of total cost B. O Total revenue minus total cost C. O Total revenu...
A: The money that is being gained by the business through conducting its operations after all expenses ...
Q: P = KR/M equation is given by O Robertson O Marshall O Irving Fisher Pigou Next
A: This equation mentioned below is given by Pigou to express his thought about cash balance approach i...
Q: In the context of the monetary approach to the determination of the exchange rate, what is the effec...
A: Exchange rate - The exchange tells us about the worth of the currency of one country in comparison t...
Q: The first cost of a certain piece of equipment is $50000. It will have an annual operating cost of $...
A: Given:- Equipment Initial cost=$50,000 Annual operating cost=$20,000 Salvage value=$5000 Equipment l...
Q: At what annual interest rate will $1,200 invested today be worth $2,500 in 12 years?
A: We have: Annual interest rate = $1,200 Time= 12 years
Help me please
Step by step
Solved in 2 steps
- Consider a consumer that lives only for two periods. He works in period 1 (and gets income Y1) and moves up the corporate ladder in period 2 (and gets income Y1 < Y2). This consumer has the usual preferences over time: u(C1) + βu(C2) 1. Assume this consumer cannot borrow. What is the consumption in period 1 and period 2? Display graphically. Show the corresponding utility curve. 2. Assume that now the consumer is allowed to save or borrow. Write down the new budget constraint. What is the consumption in period 1 and period 2? Display graphically. Could the consumer be worse off? Could the consumer be better off? Draw budget constraints such that for one of them consumer prefers to borrow and for the other - prefers to save. 3. Assume once again that a consumer cannot borrow, but can borrow and immediately sell some MacGuffins, and in the next period, the consumer must buy back the MacGuffins to return to the lender. Assume that MacGuffin t r a d e s a t P1 > 0 in the first period…Given the utility function: U = ln c + l + ln c’ + l’ and the budget constraint: w(ℎ−l)+(w′(ℎ−l′))/(1+r)=c+(c′)/(1+r) (see pictures of function and constraint) where c = current consumption, c' = future consumption, l = current leisure, l' = future leisure, and r is the market interest rate.Suppose that the current wage, w = 20 and the future wage w' = 22. a) What is the optimal value of current consumption, c? b) What is the optimal valueof future consumption, c’*?Katie Kwasi's utility function is U(x₁, x₂)=5(In x₁)+x₂. Given her current income and the current relative prices, she consumes 10 units of x₁ and 15 units of x₂. If her income doubles, while prices stay constant, how many units of x₁ will she consume after the change in income? a)10 b)20 c)15 d)5
- A person has a 2-period utility consumption function U(c1, c2), with a budget function W = c1+c2/1+ra. Explain with pictures how one should choose c1 and c2 such that MRS(from c1 to c2) equals 1+r.b. Also explain with pictures how when the individual receives income, whileconditions at that time was a crisis.Assume that consumption and leisure are perfect complements, that is, the consumer always desires a consumption bundle where the quantities of consumption and leisure are equal, that is, C=L 1) (Denote the total hours of time available by h, the real wage by w, the real dividend income from firms by pi (π), and the lump-sum tax by T. Write down the consumer’s budget constraint. 2) Determine the consumer’s optimal choice of consumption and leisure. 3) Assume that there is an increase in w . Show how the consumer’s optimal consumption bundle changes. Explain with reference to income and substitution effectsHenry's utility function is u(x,y)=max{x+3y,3x+y}. (a) Suppose Henry's current consumption bundle is (2,1.5), what is his current utility level? If he consumes the bundle (1.5,2), will his utility change from the current utility level?
- Q12. Consider a utility function: U (F,C) = FC so MU_F = C and MU_C = F.Suppose as Case X, Total income is $100 and per unit prices of Food (F) and Cloth (C) are $2 and $15, respectively. a. What is the value of MRS at the optimal point and what does this value mean? b. What is the optimal consumption bundle i.e (F*,C*)? c. Plot the budget line and clearly depict the point of optimality in the F (x-axis)-C (y-axis) space.Q5. Consider a utility function: U (F,C) = FC so MU_F = C and MU_C = F. Suppose as Case A, Total income is $120 and per unit prices of Food (F) and Cloth (C) are $2 and $10, respectively. a. What is the value of MRS at the optimal point and what does this value mean? b. What is the optimal consumption bundle i.e (F*,C*)? c. Plot the budget line and clearly depict the point of optimality in the F (x-axis)-C (y-axis) space. d. Now suppose Case B, where assuming if income decreases to $100, holding all else the same, do the same analysis (parts a-c) and contrast your answers to Case A. For part c, you should draw old (Case A) and new (Case B) budget lines/point of optimality.Eren’s two main hobbies are taking vacations overseas (V) and eating expensive meals (M). His utility function is given as: U(V,M) = V^2MLast year, the average price of taking a vacation overseas was US$200 and the average price of an expensive meal is $50. However, due to supply problems in Onions, the average price of an expensive meal rose to $75. The average price of a vacation did not change. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should be given to Eren to offset his change un utility due to the price increase of an expensive meal. Calculate the compensative variation (CV).
- Question 1 Consider a person with the utility function U (C, L) = (1 − α) log C + α log L, where L is leisure time and C is consumption of other goods measured in dollars. The person has V dollars of non-labor income and a wage of w. There are T hours available for either working or leisure. 1. Write down the person’s budget constraint. Draw a graph representing this constraint, taking care to label the axes and key points. 2. What are the person’s marginal utilities for consumption and leisure? What is her marginal rate of substitution between leisure and consumption in terms of C, L, and α? 3. Write down a condition involving the person’s marginal rate of substitution that characterizes her optimal choice. Represent this condition graphically and interpret in words. 4. Solve for the person’s optimal choices of leisure and consumption, L ∗ and C ∗ , in terms of T, V , w, and α. 5. How does L ∗ change as you increase wage w and non-labor income V ? 6. How does C ∗ change as you…Q3. Consider a utility function with one consumption good q1 and one type of leisure q2 c) Show mathematically and diagrammatically the decomposition of totaleffect.q7- When leisure is a normal good, the income effect from an increase in wages is manifest in a(n): Select one: a. desire to consume less leisure b. a change in preferences c. desire to consume more leisure d. a shift inwards of the budget constraint