Suppose there are two goods, co ee (C) and tea (T). The consump- tion set is R2 +, so both goods can be consumed in arbitrary non-negative quantities. Abdul owns
Q: Guided Practice Suppose that 0.5% is an annual interest rate. In the formula y=a*b^(x), what value…
A: Interest is the amount of money taken from the borrower by the lender over and above the principal…
Q: Philip sells homegrown heirloom tomatoes at a local farmer's market. Suppose for the past several…
A: The elasticity of demand depicts the responsiveness of the quantity demanded of a product or service…
Q: Current events related to the physiocrats period
A: The Physiocrats era refers to a time in the 18th century when a group of French economists by the…
Q: Suppose there is a new preventative treatment for a common disease. If you take the preventative…
A: Health economics is important because it explores how the economic activity of stakeholders and…
Q: our firm is based in the UK, just received USD 825,000 from a customer in the U.S., and wants to…
A: Here GBP/USD 1.2283 - 1.2425 is the bid and ask price for the given currency pair. Here 1.2283…
Q: An investment of $10,000 today, will pay 6 yearly payments of $2,500 each. Determine the rate of…
A: A Rate of return (RoR) is the net profit or loss of an investment over a given time period,…
Q: T/F/U. Tenure is an appointment awarded to assistant professors after 5 years of probationary hire…
A: Assistant professors in colleges and universities in the United States and in some other countries…
Q: If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point elasticity of…
A: Elasticity helps us determine the responsiveness of change in quantity demanded to change in…
Q: Why the creation of cooperatives among farming communities important? What are examples of value…
A: Cooperatives are organizations that are owned and democratically controlled by their members, who…
Q: Joe won $365,000 a year for life in the state lottery ($1000 per day for life). Use a labor-leisure…
A: The word "budget constraint" in economics refers to a person's ability to spend money or their level…
Q: For each of the following transactions, show the two entries in the US balance of payments. For each…
A: A country's overall economic interactions with the rest of the world over a specific time period are…
Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…
A: The market for loanable funds explains how that borrowing happens. The supply of loanable funds…
Q: When a bank grants a loan, the money supply M₁ will increase, even if the funds from the loan are…
A: Money refers ti a commodity accepted by general consent as a medium of economic exchange. money is…
Q: INTEREST RATE (Percent) Demand LOANABLE FUNDS (Billions of dollars) Supply Demand. Supply ? Scenario…
A: The government provides tax credits to consumers or businesses to help them pay less in taxes. Tax…
Q: What is the total cost of the tariff? total cost: millions of dollars
A: Market demand and market supply: The market demand function reflects the total value of all…
Q: Which only affects short run aggregate supply? Choose all that apply. Group of answer choices…
A: The aggregate supply refers to the total supply of all finished commodities produced in an economy…
Q: Question 8 (05.03 MC) If the money supply in an economy is $750 billion, the velocity of money…
A: Gross domestic product is crucial because it provides data about the dimensions of the financial…
Q: Using the midpoint formula, calculate elasticity for each of the following changes in demand. Demand…
A: Price elasticity: Price elasticity reflects the % change in the net quantity demanded for a unitary…
Q: year 1 price year 1 output year 2 price year 2 output year 3 price year 3 output a. 47.5 b. 110…
A: Introduction A price level is a measurement of the present costs of products and services that are…
Q: The market demand curve for a pair of Cournot duopolists is given as P = 36 – 3Q, where Q = Q₁ + Q₂.…
A: A Cournot duopoly is a form of oligopoly market structure where there are two firms that compete in…
Q: Identify all the possible source of risks that were bought as a result of covid’19.
A: In economics, risk is the possibility of experiencing a negative outcome or loss when making a…
Q: Which of these is not an example of a revenue stream? A. Money coming in from direct sales B. Money…
A: A firm or organization's source of money is known as a revenue stream. It describes the various…
Q: Write a demand and a supply curve expressed in the form of an exponential and logarithmic functions…
A: The demand curve is a graphical depiction of the interrelation between the quantity (Q) of a…
Q: Households and businesses were surprised by oil price increases in 1970s. What happened because of…
A: A supply shock is a startling occasion or event that disturbs the supply of labor and products in a…
Q: ax policy is one used not only for economic purposes but also for political purposes. It is the…
A: Tax is the compulsory payment made by all people, organizations, and institutions to the government.…
Q: and The price-demand and cost functions for the production of microwaves are given as p= 200- X 30…
A: When one extra unit of a commodity is sold, the total revenue changes, which is known as the…
Q: Bill O'Really of OX News observed that poultry (chicken and turkey) consumption in the US increased…
A: Supply refers to the quantity of a product or service that producers are willing to offer for sale…
Q: A factory's production pollutes a local lake. How can the Coase Theorem be applied to solve water…
A: The Coase Hypothesis recommends that in the event that property privileges are plainly characterized…
Q: 4. Suppose the own price elasticity of demand for good X is −5, its income elasticity is-1, its…
A: The price elasticity of demand calculates the change in the quantity demanded of products or…
Q: How can the existence of asymmetric information provide the rationale for government intervention?
A: Asymmetric information is a situation where one party in a transaction has more or better…
Q: Consider the Heckscher-Ohlin model of international trade. There are two goods, shoes and computers,…
A: The Heckscher-Ohlin model assumes that two countries indulge in international trade because they…
Q: Consider the O-Ring model with N = 4 tasks. Workers in country Reach have a skill, qr, that is 3…
A: The O-ring model suggests that tasks of production are highly related to each other such that, for…
Q: Make your own definition of economic globalization and tell the reason on why all products you have…
A: Globalization is a complex and multidimensional phenomenon that refers to the increasing…
Q: The MRS of food (vertical axis) for shelter (horizontal axis) measures the amount of food that must…
A: Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…
Q: You pawned your PSP at Pawnshop for P5,000 and agreed to pay the amount at the end of 9 months. The…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: 7. A firm's can sell higher quality products for more: P = 10 + 20 X, where X is the quality of the…
A: The expected profit is the likelihood of making a profit multiplied by the profit, while the…
Q: Free-Response Question The United States economy is experiencing a significant recession. (a)…
A: A recession is a period when there is a contraction in the economy. This contraction explains the…
Q: 10. T/F/U. Corrupt countries have higher GDP per capita because these countries have more power and…
A: Since you have posted multiple questions, we will provide the solution only to the first five…
Q: Section 1: True/False/Justify. [Please justify your answers with mathematical/logical arguments. N…
A: Pareto optimality is a concept in economics that is used to evaluate the efficiency of an economic…
Q: Hogwarts School of Witchcraft and Wizardry is divided into four Houses: Gryffindor, Huf- flepuff,…
A: In economics the opportunity cost refers to the value of the forgone profit from the next-best…
Q: There are three firms in an economy: A, B, and C. Firm A buys $350 worth of goods from firm B and…
A: Introduction Gross Domestic Product ( GDP ) is the total value of all the goods and services . Here…
Q: When applying for credit, is it preferable to receive a low interest rate or a high interest rate?
A: Credit is the capacity to borrow funds or to buy products or services with the knowledge that…
Q: Question 2 Suppose the economy of Poorland is described by the simple Solow model without…
A: Solow Growth model is an exogenous economic growth model based on neoclassical theories which…
Q: PJ has been owning a City Golf, model 2004 for the past 15 years and now plans to sell it. Town…
A: Given, PJ has been owning a City Golf, model 2004 for the past 15 years and now plans to sell it.…
Q: The following table lists the per gallon prices of gas and milk for 1 e months of September,…
A: The Consumer Price Index (CPI) is an estimation of the average change over time in the prices paid…
Q: In a draft instrument, the Multiple Choice gives the order, the drawee; drawer; payee drawer;…
A: In banking, a draft instrument is a type of negotiable instrument that is used for making payments…
Q: Question Now we introduce banks that will act as liquidity providers in the economy. Suppose that…
A: A bank is a financial institution that takes customer deposits and uses those deposits to make loans…
Q: Consider the market for a good that has a positive externality and that is produced by a monopolist.
A: Introduction Social surplus is the sum of consumer surplus and producer surplus. Deadweight loss…
Q: Many employers in the U.S. pay significant amounts towards their employees' health insurance…
A: Introduction Health insurance premium is the amount that you pay to the insurance provider to get…
Q: The following table contains data for a hypothetical closed economy that uses the dollar as its…
A: GDP = 950 Goverment Purchases =? T = 325 C = 500 I = 200
Suppose there are two goods, co ee (C) and tea (T). The consump-
tion set is R2
+, so both goods can be consumed in arbitrary non-negative
quantities.
Abdul owns 2000 grams of co ee but does not own any tea. He has
no other wealth. The price of co ee is pC = 2 (in Dhs per gram) and
the price of tea is pT > 0 (in Dhs per gram). Abdul can sell co ee to
earn income, which he can then use to buy tea or co ee. He can also
throw co ee away (at no cost).
Abdul's preferences can be represented by the utility function
u(c; t) = -(800 - c)2 - (800 - t)2;
where c is the quantity of co ee (in grams) and t is the quantity of tea
(in grams).
(a) In separate diagrams, illustrate (i) the map of Abdul's indi erence
curves, (ii) Abdul's constraint set.
(b) How much co ee and tea does Abdul decide to consume when (i)
pT = 2, (ii) pT = 3, and (iii) pT = 4?
(c) Illustrate Abdul's demand for co ee as a function of the price of tea (pT > 0) in an appropriate diagram.
Step by step
Solved in 3 steps with 1 images
- Eren’s two main hobbies are taking vacations overseas (V) and eating expensive meals (M). His utility function is given as: U(V,M) = V^2MLast year, the average price of taking a vacation overseas was US$200 and the average price of an expensive meal is $50. However, due to supply problems in Onions, the average price of an expensive meal rose to $75. The average price of a vacation did not change. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should be given to Eren to offset his change un utility due to the price increase of an expensive meal. Calculate the compensative variation (CV).Khan lives in a world with two consumption goods x and y. Her utility function is U (x, y) = √x² + y². a. If px = $3,py = $4, and her income, I, is equal to $50, what will be the quantities of x and y that Maya should buy to maximize her utility? Make sure that you write out the Lagrangian and the first-order conditions. (Hint: It may be easier to maximize U² than U). Have you found a true maximum? Explain your answer.Consider an economy composed of 16 consumers. Of these, 5 consumers each own one right shoe and 11 consumers each own one left shoe. Shoes are indivisible. Everyone has the same utility function, which is Min(2R, L}, where R and L are, respectively, the quantities of right and left shoes con sumed. A) (10%) Is the status quo (where each individual has his own shoe) Pareto efficient? If so, briefly explain why. If not, provide a Pareto improvement b) (10%) Characterize all Pareto efficient allocations
- T/F Explain Utility numbers cannot be negative since higher utility means a con- sumer is better off.Need Step by Step answer: How to draft on Excel. Because Income depends on work effort and work effort depends on nutrition, suppose the relationship between income (Y) and total food availability (F) in a poor household is given by: Y = 10F + 20F2 – 0.6F3 a) If food availability in a two-person household is 20, would it be “rational” to share the food? Explain. b) If food availability in a two-person household is 30, would it be “rational” to share the food? Explain.Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).
- Follow-up questions d. In this model, workers earn the same total assets whether they work L1 or L2 hours. Is the worker better offff at L1 or L2 hours of work? e. If disutility from work were included in the model, would this shrink, expand, or keep the same the size of the region where workers have no incentive to work? f. In your own version of Figure 18.7, draw three sets of plausible utility curves that take assets as a positive input and hours worked as a negative input. Draw one set so that the worker elects to work less than L1 hours, one set so that the worker elects to work exactly L1 hours, and one set so that the worker elects to work more than L2 hours. g. Explain why the utility curves cannot be drawn so as to induce the worker to work between L1 and L2 hours. h Yelowitz (1995) studies a Medicaid reform measure that reduced the Medicaid work disincentive. One of the reforms he studied raised the Medicaid eligibility threshold income level by 33%. Draw a new version of the…Sanjay won a poker game against his friends. Now he has to choose between $600 (the winnings) and the chance to play a new game. In this new game, Sanjay has a 50% chance of winning nothing and a 50% chance of winning $1000. The following graph presents the utility function of Sanjay with respect to money: 1. By how much money would his winnings need to increase or decrease so that Sanjay isindifferent between the $600 and the new game? At a different table, Juan wins $800 in a blackjack game. Similarly, he has to choose between $800 or the chance to win a new game. In this game, Juan has a 45% chance of winning nothing and a 55% chance of winning $1000. The following graph presents the utility function of Juan with respect to money: 2. By how much money would his winnings need to increase or decrease so that Juan is indifferent between the $800 and the new game? Please enter a positive number for an increase or a negative number for a decrease.i will 10 upvotes urgent Say Anna's utility function is given by UA = MAMM, where MA is Anna's wealth and MM is Marie's wealth. Initially, Anna has 160 units of wealth and Marie has 40. When Anna maximizes her utility, her utility level is equal to: Multiple Choice 10,000. 5,000. 100. 200.
- Assume you can work as many hours per day as you wish at £20 per hour, after tax. You have no other income. You have no ability to borrow or lend.a) Show how this information can be used to illustrate a feasible set, showing the choicebetween leisure time per day on the x-axis, and general consumption on the y-axis. Label the axes and intercepts. Draw some indifferences curves and show where the optimal point would be.Suppose that a consumer has a choicebetween two goods, X and Y. If the price of X is $2 and the priceof Y is $3, how much of X and Y does the consumer purchaseper period, given an income of $17 per period? Use the followinginformation about marginal utility:Units MUX MUY1 10 52 8 43 2 34 2 25 1 2How would you demonstrate part c) diagramatically 6. Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not work, you have no income. You have no ability to borrow or lend, so your consumption, c, is simply equal to your income. b) Assume that your optimal choice of consumption and leisure is to work 8 hours per day. Illustrate this choice diagrammatically using the feasible set and indifference curves. c) Use indifference curves and the feasible set to show why, given the properties of the optimal choice in part b), it is not optimal to work, say, 10, or 6 hours per day.