If consumption is $30,000 when income is $35,000, and consumption increases to $35,000 when income increases to $43,000, the MPS is Select one: O a. None of the options O b. 0 O c. 0.625 O d. 0.375
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If consumption is $30,000 when income is $35,000, and consumption increases to $35,000 when income increases to $43,000, the MPS is
Select one:
O a. None of the options
O b. 0
O c. 0.625
O d. 0.375
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- (ECONOMICS) If MPL = 2.5 when L = 400, then which of the following statements is true about APL: Select one: a. APL is at a maximum b. APL is decreasing c. APL is equal to MPL d. APL is increasingConsider the intertemporal consumption problem of Mr Cronus between two periods, say this yearand next year. His utility function takes the form U (c1; c2) = pc1 +0:97pc2, where c1 and c2 arehis consumption this and next year respectively. It can be shown (and you do not have to) thatthis utility function satis es diminishing marginal rate of substitution.His yearly income is stable at 100 unit (let say a unit is ten-thousand). He faces di¤erent interestrates between borrowing and saving. Speci cally, the saving interest rate is 0:02, whereas theborrowing interest rate is 0:04.(a) Describe the budget set facing Mr Cronus.(b) Is Mr Cronus a borrower? Explain your answer.(c) Is Mr Cronus a saver? Explain your answer.When AP L is positive but declining, the MP L could be (i) declining (ii) zero (iii) negative or (iv) any of them. Which one is the correct alternatives? Explain with diagram.
- If the inflation rate is 3 percent and the nominal interest rate is 8 percent, how much is the after-tax real interest rate if the government imposes a 20 percent interest income tax? O a. 3.4 percent O b. 4 percent O c. None of the above O d. 5.4 percent.A consumer's income in the current period is y = 100 and income in the future period is y'= 120. He or she pays lump-sum taxes t=20 in the current period and t'= 10 in the future period. The real interest rate is 0.1, or 10%, per period. (a) Determine what the consumer's optimal current-period and future-period consump tions are, and what optimal saving is, and show this in a diagram with the consumer's budget constraint and indifference curves. Is the consumer a lender or a borrower? (b) Now suppose that instead of y = 100 the consumer has y = 140 Again, determine optimal consumption in the current and future periods and optimal saving, and show this in a dia gram. Is the consumer a lender or a borrower? (c) Explain the differences in your results be tween parts (a) and (b).Assume consumption is represented by the following: C = $400 + 0.5Y. Also assume that planned investment (/) equals $100. the level of Income that occurs at the equilibrium is Select one: O a. $100 O b. $150 O c. $500 O d. $1000
- Crusoe will live this period and the next period as the lone inhabitant of his island. His only income is a crop of 100 coconuts that he harvests at the begin- ning of each period. Coconuts not consumed in the current period spoil at the rate of 10 percent per period. (LO5) a. Draw Crusoe’s intertemporal budget constraint. What will be his consump- tion in each period if he regards future consumption as a perfect, one-for- one substitute for current consumption? b. What will he consume each period if he regards 0.8 unit of future consump- tion as being worth 1 unit of current consumption?If consumption is $30,000 when income is $40,000, and consumption increases to $34,000 when income increases to $45,000, the MPC is Select one: O a. None of the options O b. 0.8 O c. 0.2 O d. 0.4You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)
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