Q: 2. Suppose that there are two groups of people in the economy. In group j, individual i accumulates…
A: Income inequality means the uneven distribution of income among the different sections of the…
Q: A young professional wishes to have $890000 in her retirement account. Its current value is $13000.…
A: An annuity is a financial product that offers the holder a series of consistent payments over a…
Q: A firm has the production function f(x,y)=x0.90.8. This firm has O constant returns to scale.…
A: The production function is:- f(x,y) = (x^0.9) * (y^0.8)
Q: n Avenger City, there are various fried chicken consumers withFea es like Captain America, Thor and…
A: Note: “Since you have posted multiple questions with multiple sub-parts, we will provide the…
Q: True or False Explain why, Use basic AD/ AS model Suppose that there is a decline in velocity…
A: The AD/AS model is a macroeconomic model that explains the relationship between aggregate demand…
Q: Assume a two-sector economy model is given by: Y = C + I, C = 97 + 0.7Y, I = 180 – 125i M s = 255,…
A: LM curve shows the combination of levels of D and S of money and an interest rate at which a money…
Q: Problem 3 Consider a firm that employs a worker on a project. If the project succeeds, it generates…
A: The game tree describes all of the game's main aspects, including the participants, strategies, and…
Q: hank you very much, as well I have two questions, but they're very simple I just am stuck on them…
A: Variable cost is that part of total cost which is dependent of output level.
Q: 4. Consider a variant on the Aghion and Tirole (1997) model. Poppy, the principal, and Aiden, the…
A: Poppy can put effort into discovering a new project. Poppy can put an effort into E, and bear the…
Q: The cost of controlling carbon dioxide emissions [C(E)] at a firm goes up rapidly as the amount of…
A: Marginal cost is defined as the additional cost incurred by a firm when it produces an additional…
Q: Question 7 Here is a question from the Froeb text. I put this her per the requests of students to…
A: Nash equilibrium (NE) is considered to be the answer to the non-cooperative game (NCO). It presents…
Q: In 1997 Fuller and coworkers at Texas A&M University estimated the operating costs of cotton gin…
A: Here, we know that, we need to draw an appropriate least square regression curve of y on x, where x…
Q: Emissions (tons/year) 2 MAC Firm 1 ($1000/ton) 0 12 16 1127 20 24 MAC Firm 2 ($1000/ton) 0 2 S 12 16…
A: Total abatement cost (TAC) is the cost of reducing emissions to a certain level, taking into account…
Q: Show the long-run equilibrium by shifting the appropriate curve or curves and/or placing the point…
A: In macroeconomics, the money supply refers to the total volume of cash held by the general…
Q: Briefly 1. describe the relationship between a country's inflation rate and its exchange rate.…
A: The general rate of price increases for products and services during a specific time period is…
Q: 4. Consider a variant on the Aghion and Tirole (1997) model. Poppy, the principal, and Aiden, the…
A: Poppy put an effort into E, and bears the cost of 12E2, but gives her the probability of being…
Q: Use the following information for 2019 to answer two questions. Prices That Rose Health insurance…
A: % change in fruit prices = (1/3)*(% change in the price of Apple) + (1/3)*(% change in the price of…
Q: What are the benefits and drawbacks of ID requirements for voting?
A: Voter suppression refer to any tactic or practice that is intended to discourage or prevent certain…
Q: Suppose an economy has four sectors: Mining, Lumber, Energy, and Transportation Mining sells 10% of…
A: An equilibrium is defined as a state of rest. It is determined at a point where the market forces of…
Q: For the following questions, you will need the following formula: let X₁ be the initial value, X, be…
A: Annual growth rate in economics refers to the percentage increase in the value of an economic…
Q: A monopolist in a given market faces inverse demand function P = 90 – 2 Q. Its cost structure is…
A: In a monopoly Market structure, A monopolist produces where the marginal revenue is equal to the…
Q: Consider an airline’s decision about whether to cancel a particular flight that hasn’t sold out. The…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Constructing a new road at a cost of $ 670,000 will result in a saving of travel time for users…
A: The Rate of Return (ROR), which is calculated as a percentage of the initial investment, is a metric…
Q: As part of Budget 2018, the Government of Canada introduced the Canada Workers Benefit (CWB) that…
A: As a part of budget 2018, the government of Canada introduced the Canada Workers Benefit (CWB). CWB…
Q: Suppose you'll have an annual nominal income of $40,000 for each of the next three years, and the…
A: real income = Nominal Income / Price level Growth in real income = Growth in nominal income -…
Q: The lower the interest rate: the greater the level of inflation the smaller the present value…
A: The interest rate used in the computation of the present value is termed as the discount rate. Using…
Q: The demand function for fresh strawberries is D(p) 200 - 5p and the supply function is S(p) = 20+ p.…
A: Market equilibrium is the point at which the quantity of goods or services supplied by producers…
Q: 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 D 33-1 E What is the profit if the price is…
A: In perfectly competitive market, firms are price takers so they take the market price as given.…
Q: "M-1" and "M-2" are two of the most well-known measures of the United States' money supply. We need…
A: Money supply refers to the total amount of money in circulation within an economy at a given time.…
Q: how to calculate the SR production function, what I know is q = 20K^.3L^.7 and r = 2 and w = 33 and…
A: Production function shows the relationship between input used and output produced. In short run,…
Q: Refer to the Figure 11a. If the economy is at point Er, a government creating economic policy in…
A: A positive output when actual output is greater than potential output. A negative output when…
Q: Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person’s status as…
A: People who are willing to work and have a paid job are considered to be employed. People who are…
Q: In real life perfect competitive market does not exist. However there are some markets that are just…
A: Perfect competition is a theoretical market structure in which there are many small firms producing…
Q: Refer to the table below: Year 1950 1960 1970 1980 1990 2000 2010 2020 Participation Rates (Age 16…
A: The formula for calculating percentage change in an economic variable X between two periods:…
Q: On the following scatter plots, the 1960 real per capita GDP is on the x-axis and the y-axis…
A: GDP stands for gross domestic product. It is defined as a total value of finished goods and services…
Q: To better understand how inflation is measured, pretend that the following table describes the…
A: Annual expenditure is the product of price per unit and yearly consumption. Item weight is…
Q: mong the following, which statement does not reflect the globalization of business?
A: Globalisation is the process of interaction among the people , the companies , the business…
Q: Label axis and curves. Determine if the situation is a Demand or a Supply and specify which…
A: The demand curve is the graphical representation of the relationship between the quantity demanded…
Q: True/ False In real life perfect competition market does not exist.
A: A market system characterized by perfect competition has a large number of customers and sellers,…
Q: PART I: Below is the quantity demanded and supplied in the market for skis. What is the equilibrium…
A: Market equilibrium refers to the state in which the quantity of a good or service demanded by…
Q: Please provide the weighted average annual salary of the following: 300 RNs $90,000/year…
A: Weighted average is a calculation that takes into account the varying degrees of weight assigned to…
Q: Alpha's Price Policy High Low OOO A Multiple Choice C Beta's Price Policy High $20 $20 $10 $30 B Low…
A: The game theory helps in understanding the strategy of the market. The player analyses the market…
Q: Explain what would happen in the following markets given the following demand or supply shocks. In…
A: Demand curve depicts the inverse relationship between price and quantity demanded, keeping other…
Q: Suppose you have utility given by U = x^.5y^.5. Px = $1 and Py = $1, m=$12. If the price of y…
A: Utility is the term used for satisfaction achieved in consuming goods and services. It is the…
Q: Quality-Quantity Trade-off: Becker’s (1981) theory proposes a quality-quantity tradeoff in fertility…
A: A tradeoff is a circumstance where you must forego or compromise one item in order to get or achieve…
Q: from Profit = 144X – 3X² – XY – 2Y² + 120Y – 35 to get the Marginal profit of X = d(Profit)/dX X…
A: Given information: Profit = 144X - 3X2 - XY - 2Y2 + 120Y - 35 The profit of the firm depends on the…
Q: You decide to buy a TV set for $800 and agree to pay for it with 18 equal monthly payments at 1.5%…
A: Present value is the value of investment in today's dollar Future value is the value of investment…
Q: What are the implications of a free government system in an economy?
A: A government that is restricted by democratic institutions and dedicated to defending individual…
Q: 6. Law of Demand 2 Suppose that your demand schedule for pizza is as follows: Price (Dollars) 8 10…
A: Quantity demanded and demand: The demanded quantity of any commodity reflects the amount of that…
Q: Decompose the change into income and substitution effects
A: The price of pillows has increased from $35 to $40 per pillow, while the price of sodas remains…
Consider an economy with 2 goods and 30 agents. There are 10 agents
each with the utility function u (x1; x2) = ln x1 + 2 ln x2 and endowments e = (3; 1).
Also, the other 20 agents each have the utility function u (z1; z2) = 2 ln z1 + ln z2 and
endowments e = (1; 2). Normalize p2 = 1. Calculate the Walrasian equilibrium price
p1*
Step by step
Solved in 2 steps with 2 images
- Suppose that consumer I has the utility function u(x,y) = x + 2y and consumer II has the utility function u(x,y) = min{x, 2y}. Consumer I initially has 12 units of y and zero units of x, while consumer II has 12 units of x and zero units of y. It is correct to state that, in competitive equilibrium, the agents' consumption basket will be:Consider an economy with 2 goods and 2 identical agents, each of whom has the following utility function, u (x1; x2) = ln x1 + 2 ln x2. The aggregate endowments of the 2 goods are given by (1; 2). Suppose there is a social planner who cares about agents equally.(a) Set up the plannerís problem. Calculate the first-best outcomePlease draw its diagram Consider the following pure exchange economy with two consumers and two goods. Consumer 1 has utility given by U1 = min {4x1, 2x2} Consumer 2 has utility given by U2 = 2x1 + x2 The initial endowment has consumer 1 starting with 200 units of x1 and 200 units of x2. Consumer 2 starts with 300 units of x1 and 300 units of x2. Draw an Edgeworth box diagram for this initial endowment complete with the indifference curves for each individual.
- Consider a two-person exchange economy in which initial endowments for both individuals are such that (e1 = e1) = (1,1). Suppose the two individuals have the following indirect utility functions: V1 (x, y) = ln M1 - a ln Px - (1-a) ln Py V2 (x, y) = ln M2 -b ln Px - (1-b) ln Py Where Mi is the income level of person i and Px and Py are the prices for goods x and goods y, respectively. a) Calculate the market clearing prices.Let Utility Function be U = min {X, Y} As given Endowment of Good 1 and Good 2 is 100 and 200 respectively. Suppose that price of good x increases from 10 to 15 and price of good y is 10 , then Calculate Endowment Income effectTwo students go out to lunch and decide to split the bill evenly between them. Each student has a quasi-linear utility function given by ui(fi , xi) = φi(fi) + xi , where φi(·) is strictly concave, fi is the amount of food consumed by student i, and xi is a composite numeraire good. Each student has a fixed budget of mi . EVALUATE THIS CLAIM: Both students eat too much!
- Points on a utility possibility curve represent a given distribution of well-being between two persons an efficient allocation of resources the maximum well-being of any one person, given the resources available and the well-being of another person all of the aboveTwo grad students go out to lunch and decide to split the bill evenly between them. Each student has a quasi-linear utility function given by ui(fi, xi) = φi(fi)+xi, where φi(·) is strictly concave, fi is the amount of food consumed by student i, and xi is a composite numeraire good. Each student has a fixed budget of mi. EVALUATE THIS CLAIM: Both students eat too much!Refer to figure. Suppose the consumer is endowed with 10 units of orange and consumes 5 units of apple. The price of the apple decreases and at the new price the consumer consumes 9 units of apple. The change in the demand for apples due to the endowment effect is equal to_____
- Consider two consumers (1; 2), each with income M to allocate between two goods. Good 1 provides 1 unit of consumption to its purchaser and units of consumption to the other consumer. Each consumer i, i = 1; 2, has the utility function is consumption of good 1 and is consumption of good 2. a. Provide an interpretation of α. b. Suppose that good 2 is a private good. Find the Nash equilibrium levels of consumption when both goods have a price of 1. c. By maximizing the sum of utilities, show that the equilibrium is Pareto-ancient if α = 0 but incident for all other values of α. d. Now suppose that good 2 also provides 1 unit of consumption to its purchaser and a, 0 ≤ α ≤ 1, units of consumption to the other consumer. For the same preferences, find the Nash equilibrium and show that it is ancient for all values of α. e. Explain the conclusion in part d.Refer to Figure 21-22. When the price of X is $80, the price of Y is $20, and the consumer’s income is $160, the consumer’s optimal choice is D. Then the price of X decreases to $20. The income effect can be illustrated as the movement from Group of answer choices D to E. D to C. C to E. E to D.Suppose Mr. and Mrs. Ward agreed not to vote in tomorrow’s election. Would such an agreement improve utility? Would such an agreement be an equilibrium?