a) Derive the intertemporal budget constraints of consumers and government. b) Assume that zt = z for all t and u(c) = log(c). Characterize the competitive equilibrium.

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A: The market equilibrium price denotes that demand and supply are become equal

Q: 4

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Q: Efficient markets occur when?

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A: Meaning of Perfect Competitive Market: The term perfect competitive market refers to the situation…

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Q: (b) You are given the following demand and supply functions le = a – ßp + o Q. = -y + ốp (α, β, σ,…

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A:

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A: A demand shock is a sudden increase or decrease in the demand for a good due to an unexpected event.…

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Q: True or False: The market price of a good reflects its highest-valued alternative use. True False…

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A: There are two different economic concepts, economies of scale and economies of scope.

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Q: Consider a competitive market where daily supply and demand are QP(P) = 15 – , and Q$(P) = 2P, where…

A: we have ,QD=15-P2 and QS=2P At equilibrium price Quantity demanded=Quantity supplied or 15-P2=2Por…

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A: Refer to step 2 for answers

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Q: Suppose that the demand and supply functions for good x are given as follows: Q = 240 – 2P, + I – P,…

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Q: Characteristics of competitive markets The model of competitive markets relies on these three…

A: In a perfectly competitive market there are large number of buyers and sellers selling identical…

Q: Suppose that the demand and supply functions for good x are given as follows: Q = 120 – 2P, + I + P,…

A: Correct: third option is correct    We will first equilibrium price where demand = supply and then…

Q: How does a market reach equilibrium without any outside intervention? Explain your answer.

A: Equilibrium: It is the situation where demand and supply intersect each other at a fixed price.…

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A: Allocative efficiency maximises surplus because resources are allocated in such a way that living…