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An individual's current income is $50,000 the person expects next period (future) income to be $50,000 as shown in the...
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...
In the diagram to the right both goods are normal goods. 1.) Use the 3-point curved...
In the diagram to the right both goods are normal goods. 1.) Use the 3-point curved line drawing tool to draw two additional indifference curves each tangent to a different budget constraint reflecting the effects of changing income on goods X and Y. Properly label these indifference curves in order of increasing utility, and respectively. 2.) Use the point drawing tool to draw two points to identify a consumer optimurn for each level of additional income. Label these new points...
A consumer's income in the current period is y=100, and income in the future period is...
A consumer's income in the current period is y=100, and income in the future period is y' =120. He or she pays lump-sum taxes t =20 in the current period and t' =10 in the future period. The real interest rate is 0.1, or 10%, per period. Also assume that this consumer likes to consume the same amount of consumption each period, that is, c = c. Questions: a) [5 points] Calculate the lifetime wealth for this consumer. b) [4...
The demand function for a monopoly shown in the graph at right is: Demand and Marginal...
The demand function for a monopoly shown in the graph at right is: Demand and Marginal Revenue 120 110 100 p 80-2Q. Use the line drawing tool to draw the marginal revenue curve associated with the monopoly's demand curve. Label this line 'MR'. 90- 80 70- Carefully follow the instructions above, and only draw the required object. 60 50- 40 30- 20- 10- 0- 0 5 10 15 20 25 30 35 40 45 50 55 60 Quantity
A consumer is choosing between magazines and books. His indifference curves are shown on the graph...
A consumer is choosing between magazines and books. His indifference curves are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (Py) is constant and equal to $5.00 1.) Use the line drawing tool to draw four separate budget constraints for the following prices for books Px1 = $3.00, Pxa_ $5.00, P. $7.50, P. $15.00 Properly label the lines 2.) Use the line drawing tool to draw...
Gasoline Price Controls. The equilibrium price of gasoline is $3.00 and the equilibrium quantity is 100...
Gasoline Price Controls. The equilibrium price of gasoline is $3.00 and the equilibrium quantity is 100 million gallons. Suppose the government sets a maximum price of $2.90. (For producers, each $0.01 increase in price increases quantity supplied by 3 million gallons.) Gasoline market 1.) Use the line drawing tool to show the maximum price. Label this line 'Price Max'. 2.) Use the point drawing tool to indicate the quantity supplied under the maximum price and label that point 'b'. Price...
Draw and Find the Equilibrium. The following table shows the quantities of corn supplied and demanded at different pric...
Draw and Find the Equilibrium. The following table shows the quantities of corn supplied and demanded at different price levels. Corn market Quantity supplied Price per ton $100 $110 $120 $130 Quantity demanded 100 80 60 40 Price per ton ($) 1.) Use the line drawing tool to draw and label the demand line given the information in the table above 2.) Use the line drawing tool to draw and label the supply line given the information in the table...
Quantity of wine (gallons) This exercise employs aspects of the basic Ricardian model of one factor...
Quantity of wine (gallons) This exercise employs aspects of the basic Ricardian model of one factor and two goods. The table below contains the output per hour worked in Home for each of the two goods 120 Cheese Wine pounda allons 100- Use the line drawing tool to draw the production possibilities frontier for cheese and wine in Home given that there are 20 total labor hours (L) available. Label this curve PPC Cerefuly ollow the instrueions above, and only...
An individual consumes two goods, clothing and food. Given the information below, illustrate the income-consumption curve....
An individual consumes two goods, clothing and food. Given the information below, illustrate the income-consumption curve. Clothing Price $8.00 $8.00 $8.00 Food Price $8.00 $8.00 $8.00 Clothing Food Income 100 100 $1,600 200 200 $3,200 300 300 $4,800 1.) Using the line drawing tool, first draw a budget line when income is $1,600. Label this line 21 2.) Using the point drawing tool, add the corresponding satisfaction-maximizing bundle. Label this point 'A'. Carefully follow the instructions above, and only draw...
The following table shows income and consumption. 350 Consumption $70 280- Income $100 $200 $300 $400...
The following table shows income and consumption. 350 Consumption $70 280- Income $100 $200 $300 $400 $500 $140 $210 $280 $350 Consumption ($) Using the multipoint curved line drawing tool, draw the consumption function given the data in the table above. Label this line 'C'. Carefully follow the instructions above, and only draw the required object. The slope of the line represents Ő 100 200 300 Income ($) 400 500 O A. government spending. O B. autonomous consumption. O C....
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...
In the diagram to the right both goods are normal goods. 1.) Use the 3-point curved line drawing tool to draw two additional indifference curves each tangent to a different budget constraint reflecting the effects of changing income on goods X and Y. Properly label these indifference curves in order of increasing utility, and respectively. 2.) Use the point drawing tool to draw two points to identify a consumer optimurn for each level of additional income. Label these new points...
A consumer's income in the current period is y=100, and income in the future period is y' =120. He or she pays lump-sum taxes t =20 in the current period and t' =10 in the future period. The real interest rate is 0.1, or 10%, per period. Also assume that this consumer likes to consume the same amount of consumption each period, that is, c = c. Questions: a) [5 points] Calculate the lifetime wealth for this consumer. b) [4...
The demand function for a monopoly shown in the graph at right is: Demand and Marginal Revenue 120 110 100 p 80-2Q. Use the line drawing tool to draw the marginal revenue curve associated with the monopoly's demand curve. Label this line 'MR'. 90- 80 70- Carefully follow the instructions above, and only draw the required object. 60 50- 40 30- 20- 10- 0- 0 5 10 15 20 25 30 35 40 45 50 55 60 Quantity
A consumer is choosing between magazines and books. His indifference curves are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (Py) is constant and equal to $5.00 1.) Use the line drawing tool to draw four separate budget constraints for the following prices for books Px1 = $3.00, Pxa_ $5.00, P. $7.50, P. $15.00 Properly label the lines 2.) Use the line drawing tool to draw...
Gasoline Price Controls. The equilibrium price of gasoline is $3.00 and the equilibrium quantity is 100 million gallons. Suppose the government sets a maximum price of $2.90. (For producers, each $0.01 increase in price increases quantity supplied by 3 million gallons.) Gasoline market 1.) Use the line drawing tool to show the maximum price. Label this line 'Price Max'. 2.) Use the point drawing tool to indicate the quantity supplied under the maximum price and label that point 'b'. Price...
Draw and Find the Equilibrium. The following table shows the quantities of corn supplied and demanded at different price levels. Corn market Quantity supplied Price per ton $100 $110 $120 $130 Quantity demanded 100 80 60 40 Price per ton ($) 1.) Use the line drawing tool to draw and label the demand line given the information in the table above 2.) Use the line drawing tool to draw and label the supply line given the information in the table...
Quantity of wine (gallons) This exercise employs aspects of the basic Ricardian model of one factor and two goods. The table below contains the output per hour worked in Home for each of the two goods 120 Cheese Wine pounda allons 100- Use the line drawing tool to draw the production possibilities frontier for cheese and wine in Home given that there are 20 total labor hours (L) available. Label this curve PPC Cerefuly ollow the instrueions above, and only...
An individual consumes two goods, clothing and food. Given the information below, illustrate the income-consumption curve. Clothing Price $8.00 $8.00 $8.00 Food Price $8.00 $8.00 $8.00 Clothing Food Income 100 100 $1,600 200 200 $3,200 300 300 $4,800 1.) Using the line drawing tool, first draw a budget line when income is $1,600. Label this line 21 2.) Using the point drawing tool, add the corresponding satisfaction-maximizing bundle. Label this point 'A'. Carefully follow the instructions above, and only draw...
The following table shows income and consumption. 350 Consumption $70 280- Income $100 $200 $300 $400 $500 $140 $210 $280 $350 Consumption ($) Using the multipoint curved line drawing tool, draw the consumption function given the data in the table above. Label this line 'C'. Carefully follow the instructions above, and only draw the required object. The slope of the line represents Ő 100 200 300 Income ($) 400 500 O A. government spending. O B. autonomous consumption. O C....
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