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- In this particular example, what are the contributions of the income and substitution effects?Give two examples of intermediate goodsA person is more likely to increase labor supply in response to an increase in the real wage, the ________ is the income effect and the ________ is the substitution effect.
- The most basic concept in economics is O wealth. O scarcity. O income. O spending.For number 8 you need to calculate both sides of the slutsky equation no then state they are equalAn example of income earned but not received is O a. welfare payments. O b. consumption. Ocundistributed profits. O d. Social Security payments.
- There are two kinds of markets in circular flow diagram in economicsThese are product markets and factor markets. A factor market is the market for goods and services.Is that true or false?Its from Macroeconomic Assignment please solve this ?(Short Answers) 1. Jie works in a university. He can work as many hours as he wishes at a wage rate of w. Let C be the number of dollars he has to spend on consumption and let R be the number of hours of leisure that he chooses. Assume that Jie has the utility function U(C, R) = In(C) + In (R). He carms $4 per hour and has 80 hours per week to devote to labor or leisure, and has no income from sources other than labor. a) How many consumptions does he choose? How many hours of leisure does he choose? b) Suppose that Jie's wage rate will rise to $6 per hour from next year. How many hours of leisure per week will he choose next year? You are required to decompose his change in demand into the substitution effect, ordinary income effect and endowment income effect. c) Suppose that Jie will get $4 per hour for the first 35 hours that he works and $6 per hour for every hour beyond 35 hours a week from next year. How many hours of leisure per week will he choose next year?
- How do you derive that the slope of a budget line is -p1/p2? I'd like to see the mathematical process. Thanks!a) Explain by using an example why an MRS (Marginal Rate of Substitution) between two goods must equal the ratio of the price of the goods for the consumer to achieve maximum satisfaction?A family of four has an income of $15,000 today and will earn $24,000 tomorrow. i). If the family consumes $11,500 in the first period and $15,000 in the second period, whatis the interest rate? ii). If the family consumes $15,000 in the first period and $13,500 in the second period, whatis the interest rate? iii). Explain the income and substitution effects and discuss which effect dominated after theinterest rate change from part (a.) to part (b.).