Homework Answers
Add Answer to:
Starting with the dynamic consumption model seen in class, consider the case where the consumer is...
3 Consumption Taxes and Ricardian Equiv- alence (8 points) Suppose a consumer has income y in...
3 Consumption Taxes and Ricardian Equiv- alence (8 points) Suppose a consumer has income y in period 1, y' in period 2, and faces a proportional tax on consumption. That is if consumption is c in period 1 'and c' in period 2, the consumer pays a tax sc on period 1 consumption and s'c' ou period 2 consumption. Thuss and s' represent the rate of sales tax in each period. The government wishes to collect total tax revenue in...
Consider the two-period model from Chapter 9, and assume there is one representative consumer with utility...
Consider the two-period model from Chapter 9, and assume there is one representative consumer with utility function uc,d) = Iníc) + In(d), so the time discount factor is 3 = 1. There is also a government that levies lump-sum taxes in the current and future periods. The government has expenditures of G = 580 in the current period and G' = 630 in the future period. (a) Suppose the consumer has current and future income (w.y') = (3500, 6510), and...
3. Consider the two period setup for the household . Suppose the government initially raises revenue...
3. Consider the two period setup for the household . Suppose the government initially raises revenue only by taxing interest income. This means the individual's budget constraint is: C2 1(1 T)r where T is the tax rate. The government's revenue is zero in period 1 and TrĢ 0) where C is the individual's choice of Cı given the tax rate. Now suppose the government eliminates the taxation of interest income and instead institutes lump-sum taxes of amounts Tı and T2...
Question 1 (3 Points): Assume a consumer has current-period income y = 120, future-period income y'...
Question 1 (3 Points): Assume a consumer has current-period income y = 120, future-period income y' = 140, current and future taxes t = 20 and t' = 10, respectively, and faces a market real interest rate of r = 0.08, or 8% per period. The consumer has the following preferences over current and future consumption: U(c, c') = min(4c, 3c'). a) (1 points) Determine the consumer's lifetime wealth. b) (2 points) Determine what the consumer's optimal current-period and future-period...
3. A consumer lives for two periods. His income in period 1 is Y, and his...
3. A consumer lives for two periods. His income in period 1 is Y, and his income in period 2 is Y.,. The consumer is free to lend and borrow at zero interest rate (r=0 and R=1+r=1). Y, = Y, = 10. (a) What is the price of consumption in period 1 in terms of consumption in period 2? (How many units of period 2 consumption must the consumer give up to get an additional unit of consumption in period...
2 Two Period Model of Consumption/Saving Decisions with Taxes (8 points) Assume a consumer who has...
2 Two Period Model of Consumption/Saving Decisions with Taxes (8 points) Assume a consumer who has current period income y200, future period income y-150, current taxes t = 40, and future taxes t' 50, and faces a market interest rate of r-5 percent or .05. The consumer would like to consume such that e'=e*(1+r) if possible. However, this consumer is faced with a credit market imperfection, in that no borrowing is allowed. That is s must be greater or equal...
A consumer receives income y in the current period, income yœ in the future period, and...
A consumer receives income y in the current period, income yœ in the future period, and pays taxes of t and t œ in the current and future periods, respectively. The consumer can borrow and lend at the real interest rate r. This consumer faces a constraint on how much he or she can borrow, much like the credit limit typically placed on a credit card account. That is, the consumer cannot borrow more than x, where x < we...
A consumer receives income y in the current period, income yœ in the future period, and pays taxes of t and t œ in the c...
A consumer receives income y in the current period, income yœ in the future period, and pays taxes of t and t œ in the current and future periods, respectively. The consumer can borrow and lend at the real interest rate r. This consumer faces a constraint on how much he or she can borrow, much like the credit limit typically placed on a credit card account. That is, the consumer cannot borrow more than x, where x < we...
1. Consider the following two period consumption savings problem. A consumer cares about consumption (c and...
1. Consider the following two period consumption savings problem. A consumer cares about consumption (c and future consumption c according to Assume that U(c) is given by for some constant y. In the present the consumer chooses how much to consume and how much to save out of her income y>0 This decision is made in the knowledge that in the future she will be retired, have no income, and thus future consumption will be entirely out of savings: c)a,...
3. Consider a representative consumer who has preferences over an aggregate consumption good e and leisure....
3. Consider a representative consumer who has preferences over an aggregate consumption good e and leisure. Her preferences are described by the uility function: U(c,l) In(e) +In(l) The consumer has a time endowment of h hours which can be used to work at the market or enjoyed as leisure. The real wage rate is w per hour. The worker pays a proportional wage tax of rate t, so the worker's after-tax wage is (1 t). The consumer also has dividend...
3 Consumption Taxes and Ricardian Equiv- alence (8 points) Suppose a consumer has income y in period 1, y' in period 2, and faces a proportional tax on consumption. That is if consumption is c in period 1 'and c' in period 2, the consumer pays a tax sc on period 1 consumption and s'c' ou period 2 consumption. Thuss and s' represent the rate of sales tax in each period. The government wishes to collect total tax revenue in...
Consider the two-period model from Chapter 9, and assume there is one representative consumer with utility function uc,d) = Iníc) + In(d), so the time discount factor is 3 = 1. There is also a government that levies lump-sum taxes in the current and future periods. The government has expenditures of G = 580 in the current period and G' = 630 in the future period. (a) Suppose the consumer has current and future income (w.y') = (3500, 6510), and...
3. Consider the two period setup for the household . Suppose the government initially raises revenue only by taxing interest income. This means the individual's budget constraint is: C2 1(1 T)r where T is the tax rate. The government's revenue is zero in period 1 and TrĢ 0) where C is the individual's choice of Cı given the tax rate. Now suppose the government eliminates the taxation of interest income and instead institutes lump-sum taxes of amounts Tı and T2...
Question 1 (3 Points): Assume a consumer has current-period income y = 120, future-period income y' = 140, current and future taxes t = 20 and t' = 10, respectively, and faces a market real interest rate of r = 0.08, or 8% per period. The consumer has the following preferences over current and future consumption: U(c, c') = min(4c, 3c'). a) (1 points) Determine the consumer's lifetime wealth. b) (2 points) Determine what the consumer's optimal current-period and future-period...
3. A consumer lives for two periods. His income in period 1 is Y, and his income in period 2 is Y.,. The consumer is free to lend and borrow at zero interest rate (r=0 and R=1+r=1). Y, = Y, = 10. (a) What is the price of consumption in period 1 in terms of consumption in period 2? (How many units of period 2 consumption must the consumer give up to get an additional unit of consumption in period...
2 Two Period Model of Consumption/Saving Decisions with Taxes (8 points) Assume a consumer who has current period income y200, future period income y-150, current taxes t = 40, and future taxes t' 50, and faces a market interest rate of r-5 percent or .05. The consumer would like to consume such that e'=e*(1+r) if possible. However, this consumer is faced with a credit market imperfection, in that no borrowing is allowed. That is s must be greater or equal...
1. Consider the following two period consumption savings problem. A consumer cares about consumption (c and future consumption c according to Assume that U(c) is given by for some constant y. In the present the consumer chooses how much to consume and how much to save out of her income y>0 This decision is made in the knowledge that in the future she will be retired, have no income, and thus future consumption will be entirely out of savings: c)a,...
3. Consider a representative consumer who has preferences over an aggregate consumption good e and leisure. Her preferences are described by the uility function: U(c,l) In(e) +In(l) The consumer has a time endowment of h hours which can be used to work at the market or enjoyed as leisure. The real wage rate is w per hour. The worker pays a proportional wage tax of rate t, so the worker's after-tax wage is (1 t). The consumer also has dividend...
Most questions answered within 3 hours.
-
Temperament can play a role in parenting style and, sometimes, it
can be challenging for a...
asked 5 minutes ago -
Company XYZ uses a standard costing to evaluate operational
performance against budget.
The following budget and...
asked 6 minutes ago -
How does procurement play a role in the value chain process?
Give an example.
asked 17 minutes ago -
6.) A clay vase on a potter's wheel experiences an angular
acceleration of 7.90 rad/s2 due...
asked 17 minutes ago -
Question about JS form validation:
I want to check these two input (name, question) with
one...
asked 19 minutes ago -
Acetic acid, CH3COOH, Ka = 1.8 x 10-5 can be converted
into the acetate ion, CH3COO-2,...
asked 21 minutes ago -
An optical fiber consisting of a core made of glass (n = 1.667)
surrounded by a...
asked 22 minutes ago -
Bright and dark fringes are seen on a screen when light from a
single source reaches...
asked 31 minutes ago -
C9H12
13C NMR
7 peaks
1H NMR
δ 1.13 (triplet, 3H); δ 1.71 (multiplet, 2H); δ...
asked 42 minutes ago -
Consider a monoatomic ideal gas undergoing the following cycle:
starting point (a), pressure increases at a...
asked 42 minutes ago -
10) (a) In a hypothesis testing procedure explain the difference
between a type 1 and type...
asked 44 minutes ago -
Given the line notation, identify the anodic and
cathodic reactions and overall reaction:
Ag(s)| AgCl(s) |...
asked 1 hour ago