Suppose you hate typing and you hate filing. Your boss tells you can divide your 8...
Suppose you hate typing and you hate filing. Your boss tells you can divide your 8 hour day
anyway you like between these two activities, as long as you work the entire 8 hours.
(a) Draw your “budget” constraint between “hours spent typing” and “hours spent filing.”
(b) Suppose you choose to type 3 hours and file for 5 hours and this is your unique optimum(that is, you strictly prefer (3,5) to any other feasible choice). Draw an indifference
curve that would be consistent with your choice.
Homework Answers
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Suppose you hate typing and you hate filing. Your boss tells you
can divide your 8...
Suppose you have 24 hours per day that you can allocate between leisure and working (i)...
Suppose you have 24 hours per day that you can allocate between leisure and working (i) Draw the budget constraint between “leisure hours” on the horizontal axis and “wage income” on the vertical when the wage rate is $40 per hour. Mark an optimum point A that is meaningful. Draw a new budget constraint when the wage rate falls to $30 per hour. Show a new optimum point B. (ii) On your indifference curve diagram, decompose the effect of the...
Please show steps for parts g through k Thank you for your help! 1. Suppose the...
Please show steps for parts g through k
Thank you for your help!
1. Suppose the following is true about Edna's utility: u = 10c0.5 p0.5 a. Calculate her utility if she consumes c = $49 and enjoys l = 12.25 hours of leisure. b. If she increases leisure to l = 16 hours, how much does she need to consume in order to maintain her level of utility in part (a)? C. If she decreases her leisure to l...
Suppose you must divide your time between studying for your math final and writing a final...
Suppose you must divide your time between studying for your math final and writing a final paper for your English class. The fraction of your time that you spend studying math and its relation to your grade in the two classes is given in the table below. Fraction of Time Math English Spent on Math 0 0 97 20 45 92 40 65 85 60 75 70 80 82 50 100 88 0...
trate how this works. 8. Suppose that a consumer can earn a higher wage rate for...
trate how this works. 8. Suppose that a consumer can earn a higher wage rate for working "overtime. That is, for the first q hours the consumer works, he or she receives a real wage rate of w, and for hours worked more than q he or she receives w2, where w,>w Suppose that the consumer pays no taxes and receives no nonwage income, and he or she is free to choose hours of work a. Draw the consumer's budget...
Question 8 Suppose that you have $10,000 to invest, and you can invest it in stocks...
Question 8 Suppose that you have $10,000 to invest, and you can invest it in stocks or bonds. Each month, bonds yield a certain return of 1.1%. Each month, stocks yield a risky return of 2% with probability 0.8 and - 1.2% with probability 0.2. Assume returns are independent across months. You choose your portfolio as suggested by Benartzi & Thaler. Let x be the change in your portfolio's value between now and the next time you evaluate your portfolio....
3. Suppose you have 24 hours to allocate between leisure and working at $10 an hour....
3. Suppose you have 24 hours to allocate between leisure and working at $10 an hour. One day the government simultaneously institutes a new program consisting of two policies: a 50% income tax and a plan whereby everybody in the country receives a gift from the government of $60 a day. (a) Draw the two budget lines (you may draw a total of three budget lines since the program contains two separate parts.) (b) Suppose that the government chose the...
You are indifferent between spending one hour commuting by bus (xB) or one hour by car...
You are indifferent between spending one hour commuting by bus (xB) or one hour by car (xC). However, the bus averages 30mph (due to frequent stops), while the car averages 60mph. Your utility is expressed in miles commuted, and depends on the hours spent in either vehicle: u = 30xB + 60xC. Draw the indifference curves for u=900, u’=1200 and u’’=1500. A bus ticket costs $3 for a 30 minute ride, so the price for 1 hour of bus is...
Instructions: Answer the following questions as completely as possible. Write your answer neatly and legibly. When...
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Your boss is back. This time he/she provides you a partial model to a bond valuation....
Your boss is back.
This time he/she provides you a partial model to a bond valuation.
This bond is a 20-year, 8% semiannual coupon bond with a par value
of $1,000 may be called in 5 years at a call price of $1,040. The
bond sells for $1,100. (Assume that the bond has been issued.) She
needs you to complete the partial model for her. She needs the
following to be answered.
What is the bond's yield to
maturity?
What...
Your boss is back. This time he/she provides you a partial model to a bond valuation....
Your boss is back. This time
he/she provides you a partial model to a bond valuation. This bond
is a 20-year, 8% semiannual coupon bond with a par value of $1,000
may be called in 5 years at a call price of $1,040. The bond sells
for $1,100. (Assume that the bond has been issued.) She needs you
to complete the partial model for her. She needs the following to
be answered. What is the bond's yield to maturity? What...
Please show steps for parts g through k
Thank you for your help!
1. Suppose the following is true about Edna's utility: u = 10c0.5 p0.5 a. Calculate her utility if she consumes c = $49 and enjoys l = 12.25 hours of leisure. b. If she increases leisure to l = 16 hours, how much does she need to consume in order to maintain her level of utility in part (a)? C. If she decreases her leisure to l...
trate how this works. 8. Suppose that a consumer can earn a higher wage rate for working "overtime. That is, for the first q hours the consumer works, he or she receives a real wage rate of w, and for hours worked more than q he or she receives w2, where w,>w Suppose that the consumer pays no taxes and receives no nonwage income, and he or she is free to choose hours of work a. Draw the consumer's budget...
Question 8 Suppose that you have $10,000 to invest, and you can invest it in stocks or bonds. Each month, bonds yield a certain return of 1.1%. Each month, stocks yield a risky return of 2% with probability 0.8 and - 1.2% with probability 0.2. Assume returns are independent across months. You choose your portfolio as suggested by Benartzi & Thaler. Let x be the change in your portfolio's value between now and the next time you evaluate your portfolio....
3. Suppose you have 24 hours to allocate between leisure and working at $10 an hour. One day the government simultaneously institutes a new program consisting of two policies: a 50% income tax and a plan whereby everybody in the country receives a gift from the government of $60 a day. (a) Draw the two budget lines (you may draw a total of three budget lines since the program contains two separate parts.) (b) Suppose that the government chose the...
Your boss is back.
This time he/she provides you a partial model to a bond valuation.
This bond is a 20-year, 8% semiannual coupon bond with a par value
of $1,000 may be called in 5 years at a call price of $1,040. The
bond sells for $1,100. (Assume that the bond has been issued.) She
needs you to complete the partial model for her. She needs the
following to be answered.
What is the bond's yield to
maturity?
What...
Your boss is back. This time
he/she provides you a partial model to a bond valuation. This bond
is a 20-year, 8% semiannual coupon bond with a par value of $1,000
may be called in 5 years at a call price of $1,040. The bond sells
for $1,100. (Assume that the bond has been issued.) She needs you
to complete the partial model for her. She needs the following to
be answered. What is the bond's yield to maturity? What...
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