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1. What are the assumptions of the Fisher’s Intertemporal Choice Model?
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- a. Discuss the assumptions of the Fisher’s Intertemporal Choice Model b. Using Fisher's Intertemporal Choice model, consider the following scenario:i. 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? ii. 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? c. Graphically depict and explain the Consumer’s optimum in the Fisher’s Intertemporal Choice Model.AP Microeconomics. What assumptions does the model of intertemporal choice makes that are not likely true in the real world and would make the model harder to use in practice?What is the purpose of macroeconomic models? How can a model of ice creamproduction be used to explain 50-fold income diferences across countries?
- Explain in detail what are Computable General Equilibria Models?What are the limitations of Samuelson general equilibrium modela) What are some of the main assumptions behind the H-O (Heckscher-Ohlin) model. b) What is/are the assumption(s) of the H-O model in regards to demand? How does (do) this (these) deviate from the Classical School assumptions? c) Examine the Stolper-Samuelson Theorem in conjunction with the H-O model and the factors of production.
- a. As the interest rate rises, does the intertemporal budget constraint become steeper or flatter? b. Would the assumption that goods are perfect substitutes be valid in a study of intertemporal food purchases?What are the key assumptions and limitations of econometric models when applied to forecasting economic variables?Review the fundamental microeconomic assumptions on the consumers’ behaviour within the neoclassical model. What are the main strengths and the main limitations of those assumptions? Discuss with theoretical and applied evidence.
- What are the three main assumptions of the cumulative causation theory?Identify principles of classical and neoclassical economics and summarize theirimplications for the environmentExplain why macroeconomists like to build models and why do macroeconomists build models based on microeconomic principles? Discuss.
