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Ans) the correct option is D) none of the above
Relative price of paper increases because price of paper of falls. Real income in terms of books increases.
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Alison has $50 per month that she spends on books and paper. If the price of...
Emily's income is $120. She spends her entire income on books. Emily considers paperback and electronic...
Emily's income is $120. She spends her entire income on books. Emily considers paperback and electronic books to be perfect substitutes, and she is always indifferent between one paperback book and one electronic book. Initially, the price of a paperback book is $15 and the price of an electronic book is $10. Then the price of a paperback book falls to $8. Which of the following statements is true? a) For paperback books, the income and substitution effects have the...
13. Reducing risks with put options Aa Aa Alison owns 100 shares of RTE Telecom Inc. stock that she bought for $40 per share. Alison bought a put option for all 100 shares of the stock with a strike...
13. Reducing risks with put options Aa Aa Alison owns 100 shares of RTE Telecom Inc. stock that she bought for $40 per share. Alison bought a put option for all 100 shares of the stock with a strike price of $37 per share, option price of $2 per share, and a three-month term. Alison probably bought the option because she What did Alison pay to buy the option? $| sees a bright future for the company and its stock...
Chloe makes $500 per week and spends all her income on books and tea. Books cost...
Chloe makes $500 per week and spends all her income on books and tea. Books cost $25 each, and Chloe buys 16 each week. Tea costs $5 per cup, and Chloe buys 20 cups. When Chloe's income falls to $450 per week, she cuts her consumption of books by 3 books and purchases 5 more cups of tea. Based on these figures, indicate whether each of the following statements is true or false. a. Books are an inferior good. O...
The table below shows Louisa’s preferences for the number of books she buys per month, holding...
The table below shows Louisa’s preferences for the number of books she buys per month, holding the prices of all goods constant. Income (thousands of $) Optimal number of books Income elasticity of demand for books 10 3 20 5 30 10 40 15 50 15 Complete the income elasticity of demand column for the table above (using the midpoint method). Are books ever an inferior good for Louisa? At what level(s) of income are books a luxury? Draw a...
Suppose that a consumer has $200 to spend per month. Assume that the price of a...
Suppose that a consumer has $200 to spend per month. Assume that the price of a unit of a household product is $5. For each of the following scenarios, draw the consumerís budget constraint by plotting all else on the y-axis and household products on the x-axis. (a) For every $100 she spends on household products she gets $10 back which she can spend on anything. (b) Suppose that once the consumer purchases 10 household products, each additional household product...
The classical dichotomy is the separation of real and nominal variables. The following questions test your...
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Poornima spends all of her money on comic books and beignets. In 2012, she earned $16.00 per hour, the price of a comic book was $8.00, and the price of a beignet was $1.00. Which of the following give the nominal value of a variable? Check all that apply. O Poornima's wage is 2 comic books per hour in 2012....
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of...
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Dina spends all of her money on comic books and beignets. In 2012, she earned $27.00 per hour, the price of a comic book was $9.00, and the price of a beignet was $3.00. Which of the following give the nominal value of a variable? Check all that apply. Dina's wage...
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of...
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Alyssa spends all of her money on comic books and mandarins. In 2015, she earned $16.00 per hour, the price of a comic book was $8.00, and the price of a mandarin was $1.00. Which of the following give the nominal value of a variable? Check all that apply. The price...
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of...
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Eileen spends all of her money on comic books and beignets. In 2014, she earned $27.00 per hour, the price of a comic book was $9.00, and the price of a beignet was $3.00. Which of the following give the nominal value of a variable? Check all that apply. Eileen's wage...
a. The Smith family has an income of $1,000 per month, and currently spends $400 monthly...
a. The Smith family has an income of $1,000 per month, and currently spends $400 monthly on food. Assume that the initial price of a unit of food is $1, and the initial price of a unit of “all other goods” is also $1. Draw this budget line, and also an indifference curve – which we assume has the standard shape – that the family can just reach, given its budget. b. The government considers that the Smith family is...
13. Reducing risks with put options Aa Aa Alison owns 100 shares of RTE Telecom Inc. stock that she bought for $40 per share. Alison bought a put option for all 100 shares of the stock with a strike price of $37 per share, option price of $2 per share, and a three-month term. Alison probably bought the option because she What did Alison pay to buy the option? $| sees a bright future for the company and its stock...
Chloe makes $500 per week and spends all her income on books and tea. Books cost $25 each, and Chloe buys 16 each week. Tea costs $5 per cup, and Chloe buys 20 cups. When Chloe's income falls to $450 per week, she cuts her consumption of books by 3 books and purchases 5 more cups of tea. Based on these figures, indicate whether each of the following statements is true or false. a. Books are an inferior good. O...
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Poornima spends all of her money on comic books and beignets. In 2012, she earned $16.00 per hour, the price of a comic book was $8.00, and the price of a beignet was $1.00. Which of the following give the nominal value of a variable? Check all that apply. O Poornima's wage is 2 comic books per hour in 2012....
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Alyssa spends all of her money on comic books and mandarins. In 2015, she earned $16.00 per hour, the price of a comic book was $8.00, and the price of a mandarin was $1.00. Which of the following give the nominal value of a variable? Check all that apply. The price...
3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Eileen spends all of her money on comic books and beignets. In 2014, she earned $27.00 per hour, the price of a comic book was $9.00, and the price of a beignet was $3.00. Which of the following give the nominal value of a variable? Check all that apply. Eileen's wage...
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