Economists use the mid-point formula for calculating a percentage change because it yields the same answer no matter if the variable increases or decreases. Select one: True False
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- what happens to elsticity if demand curve is linear (straight curve)?Name three products for which subjectivediscretionary income might be a better predictor ofconsumption than actual income. Justify your answer.What type of variable is Life ladder, or the happiness score index, as reported in the world happiness report?
- Suppose a person can work up to 80 hours per week at a pre-tax wage of $20 per hour but faces a constant 20% payroll tax. Assume that under these conditions the person maximizes utility by choosing to work 50 hours each week. The government proposes a negative income tax so that everyone receives $300 per week regardless of how much they work. To pay for the negative income tax, the payroll tax would be increased to 50%. Using the labor-leisure model, graphically show whether a person would be better off if the negative income tax is adopted and indicate whether hours worked increases or decreases due to the policy.What are the ‘Lessons’ of the Specific Factor Model? Demonstrate this lesson using formal modeling (either graphs or equations).Using Fisher's Intertemporal Choice model, consider the following scenario: Suppose Milo earns $1,750 in the first period and $2,500 in the second period. If he consumes $1,200 in the first period and $1,550 in the second period, what is the interest rate? Now if Milo’s consumption changes to $1,800 in the first period and $2,000 in the second period, what is the new interest rate?
- Find APC if consumption is $300 and income is $3000Explain the difference between a utility function and correspondenceSarah is considering two investment proposals. Proposal A is to purchase a new computer. Proposal B is to purchase a new printer. She will not buy the printer unless she buys the computer. The relationship between Proposals A and B is best described by which of the following? a. B and A are mutually exclusive b. B is contingent on A c. A is contingent on B d. Not enough information is given to determine a relationship
