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- A typical consumer's "leisure basket" in the base year 2019 is as follows: 20 movie tickets $15.00 each 4 theme park tickets $80.00 each 30 swimming passes $10.00 each 2 interstate holidays $400 each 1 international holiday $2000 each The closure of international borders decreases demand for international holidays in 2020. This causes interstate holidays to rise in price to $800 each. The price of other items in the leisure basket are unchanged. a. Calculate the change (as a percentage) in the "leisure index" between 2019 and 2020. b. Suppose consumer preferences change in 2020 and they are completely indifferent between two interstate holidays and one international holiday. In this situation, how large is the substitution bias in the "leisure index"? c. Explain how biases in the "leisure index" create a difference between the price changes consumers experience and the price changes described by the "leisure index".can you help me plug in the answers to this graph and the question under it the ms1 line only has two points as does ms2 as wellA family of four has an income of $15,000 today and will earn $24,000 tomorrow. If the family consumes $11,500 in the first period and $15,000 in the second period, what is the interest rate. (this question deals with intertemporal choice from microeconomics) (also I am seeking the formula to find the interest rate)
- q7- When leisure is a normal good, the income effect from an increase in wages is manifest in a(n): Select one: a. desire to consume less leisure b. a change in preferences c. desire to consume more leisure d. a shift inwards of the budget constraintDefine the term cost-of-living index?If the turning points of an economic variable occur after the turning points of economic activity, then the economic variable is called a . a procyclical variable b . a countercyclical variable c. an acyclical variable d . a leading variable e . a coincident variable f . a lagging variable
- According to the Permanent Income Hypothesis (PIH), what should a consumer do if she receives news that she will be demoted next year (and her salary will be halved)? Draw the paths of income and consumption for this consumer.Following exercise is requested:(a) Draw a budget line knowing that: nominal income is $100/week, price of lamb meat (Pm) is $2/kilo and price of housing (Ph) is $20/week. It is also known that ALL INCOME is spent on both goods.b) Assume now that monetary income remains CONSTANT, but price of lamb meat DOUBLES to $4/kilo, while the price of housing DECREASES to $10/week. Draw new budget line.Describe the effects of a decrease in the interest rate on present and next period’s consumption if the individual is a net lender (i.e., has savings) after period 1 and the substitution effect is larger than the income effect. Show your answer graphically
- For Questions 13 and 14, Consider that Kim is a Nurse at a hospital in Atlanta and in 2010 she made an annual salary of $30,000. She has gotten several performance raises and one promotion over the years and in 2019 she earned $46,000 for the year. The Price Index representing her buying power in 2010 was 100 and in 2019 it is 164. Kim has asked you as her private economist to tell her whether or not she is better off now or worse off now than in 2010. What is the approximate value of her buying power now expressed in 2010 dollars? Question 13 options: $46,000 $18,000 $28,000 $36,000Q2. a. What is the law of demand? Give two examples of how you have observed the law of demand at work in the “real world.” How is the law of demand related to the demand curve?b. What variables influence the demand for a normal good? Explain why a reduction in the price of a normal good does not increase the demand for that good.Q4. What is econometric forecasting? If econometrics forecasting is considered the bestforecasting technique, what usefulness remains over other forecasting techniquesCase study The recent report on SMEs across the country asserted that the contribution of SMEs to GDP and employment is not encouraging (Ndumanya, 2013; SMEDAN, 2012). The mortality rate of SMEs in the country is now about 80% before their fifth year anniversary, which was 15% in 2002 (SMEDAN, 2012). Hence, this indicates the low growth and high mortality rate of SMEs in the country. Consequently, the performance of SMEs in Nigeria is considered to be below expectations compared to other lower middle income countries (Ndumanya, 2013). Recently, Malam Sanusi Lamido Sanusi, Governor of the Central Bank of Nigeria (CBN) affirmed that Nigerian SMEs cannot perform to expectations because of certain constraints related to financing, as a result of their unprofitable business operations (Bangudu, 2013a; Sanusi, 2013). Based on these, some of the studies have reported a significant relationship between EO and firm performance (Fairoz et al., 2010; Li, Huang, & Tsai, 2009; Lumpkin &…
