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- Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. a. Given this information, construct the equation for Akua’s Budget Line. c. Akua gets a research grant and her income increases to GHS 800 per month. What is the new equation of her budget line? What if income stays constant at GHS 400 and the price of Yoghurts increase to GHS10? d. Assume that prices are the same as used in part a. If the marginal utility of a Yoghurt is 20, what is the marginal utility of Bread if she is maximizing her utility? e. Now assume that Yoghurt and Bread are compliments for Akua. For her to consume all her income of GHS 400, and the prices used in part a. What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes?Consider an economy that is characterized by the following equations C= 400 + 0 5 Vd I = 700 - 40001 + 0.1V G= 200 T= 200 (MP)d = 0.75Y - 75001 (M/P)' = 600 What is the equilibrium output/ income (X)?What are the nonincome determinants of Consumption and Savings?
- WHY DID YOU COPY ANSWERS FROM PREVIOUS " QUESTION 2". I JUST SEND YOU TWO QUESTION, NOT a,b,c. THERE IS NO ANSWE FOR MY 2 QUESTIONS. ANSWER THESE TWO QUESTION IMMIDEATELLY. THIS IS FOR MATHEMATICAL ECONOMIC CLASS Question (2): The market for disposable cell phones: Q = 2300 – 16p and Q = 1850 + 14p. Suppose that more consumers prefer the disposable cell phone over the smart phone because the disposable cell phone is more durable than the smart phone. This latest news comes after the fact that firms that manufacture disposable cell phones have the latest technology integrated into their production facilities. What will be the market effect? Going back to question (d), suppose that the price of a disposable cell phone is now set at $11.75. How many disposable cell phones will be demanded by consumers? Whichever curve you’ve determined should be shifted, derive the new function.The most basic concept in economics is O wealth. O scarcity. O income. O spending.Why does equilibrium output increase as the marginalpropensity to consume increases?
- ) Consider the following closed economy SImodel set upY = 18000C = 300 + 0.8(Y − 2500)I = 3500 − 400(r)G = 3000T = 2500(a) Compute the impact on r and I, if Gincreases by 500.(b) Compute the impact on r and I, if Gincreases by 500.(c) Compute the impact on r and I, if bothG and T increase by 500.Felice lives and works for two periods. In the first period, she earns 520 coconuts and in thesecond period, she earns 570 coconuts. In each period, she pays 20 coconuts in taxes.a. Suppose that Felice can save or borrow from a bank at the same interest rate of 10%.Suppose also that she likes to consume today 240 coconuts. Draw herbudget constraint including both intercepts, her endowment point including its coordinates,and use an indifference curve to show her optimal consumption point and its coordinates.b. Suppose that the government cuts taxes by 10 coconuts. What will the government haveto do to taxes in the future period to meet its lifetime budget constraint?c. What is the effect of the government’s action on Felice’s lifetime wealth, budgetconstraint and endowment point? Show and explain.d. What is the effect of the tax cut on her current consumption and welfare? Does theRicardian equivalence hold? Explain!e. Now suppose that the economy enters a recession, and some people…Given the following consumption function: C = a + bYda. What are the parameters a and b?b. What is Yd?c. Given I = Io + dY, G = Go, T = to + cY, TR = TRo, X= Xo and M = Mo + m1Y write down the reduced form equation for computing equilibrium income.
- Autonomous consumption = R100mInvestment spending = R300mGovernment spending = R200 millionExports = R150 millionAutonomous imports = R100 millionMarginal propensity to consume =2/3Tax rate = 1/10Marginal propensity to import = 1/10Yf = R2 150 millionQ.1.1 Calculate the level of autonomous spending in this economy. (2)Q.1.2 Calculate the size of the multiplier. (3)Q.1.3 Calculate the equilibrium level of income. (2)Q.1.4 Calculate the change in government spending required to reach full employmentin the economy.Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. (a) Assuming that Yoghurt and Bread are compliments for Akua, construct the equation for Akua’s Budget Line for her to consume all her income of GHS 400. (b) What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes?Consider an economy with two periods (interpreted as “when young” and “when old” periods)and two consumers, Gillian Davis and Joana Wolinsky. Gillian is a star ballet dancer with a lifetime income given by ωG= (400,0). Joana is an Econ Ph.D. student with incomeωJ= (0,400). Gillian and Joana have identical utility functions given by Ui(x1,x2) = 6 lnx1+ 3 lnx2 for i=G, J a) Plot an Edgeworth box and mark the initial endowment point. b) Write the general definition of Pareto efficient allocation (one sentence) and give the equivalent condition in terms of MRS (give formula). Check if this condition is satisfied for initial endowments. c) Derive the contract curve (write down the appropriate conditions and solve for the curve) and depict it in the Edgeworth box. d) Suppose Gillian and Joana can “trade” consumption in both periods at pricesp1,p2. Find the competitive equilibrium (6 numbers) and depict the equilibrium allocation in the Edgeworth box. e) Using the MRS condition from part b),…