12. Describe graphically with minimal (but necessary) discussion the Hicksian income/substitution decomposition that would lead to a perfectly inelastic demand curve.
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- Derive the Slutsky equation step by step. What is the significance of this equation? What is the difference between the Hicksian and the Marshallian demand functions? Do not use chatgptExplain three basic sources of deviationsfrom PPP.Show graphically both slutsky and Hicks analysis for fall in price of giffen goods. Explain using diagram
- Define and explain the difference between Marshallian demand function and Hicksian demand function.What Is Quantity Discount Analysis?On December 30, 1974, the hypothetical country Alpha decided to introduce a minimum wage policy. Cities with ID numbers 11, 23, 45, 57, 60, and 61 were randomly chosen to implement this minimum wage policy. The remaining cities in country Alpha did not adopt a minimum wage policy. You are asked to empirically and theoretically evaluate the impact of the introduction of the minimum wage in country Alpha on the labour market outcomes. Now suppose that there is mobility in the labour market in country Alpha and we are in the pre-minimum wage period. Country Alpha receives migrants from country Beta and these migrants are positively selected. a) Suppose country Alpha decides to adopt a welfare program to increase the minimum income of its workers. This minimum income is granted to all native workers, immigrant workers, and the new incoming immigrants. Using the Roy model, and ignoring how the program is funded, with the aid of a diagram, discuss how the welfare program changes the…
- Give typing answer with explanation and conclusion What does Caroline Criado Perez mean by the term “the default male”?In the specific factor model with two goods 1 and 2 and labour as the mobile factor, in the autarky equilibrium it must hold that A P1MPL1=P2MPL2 for marginal labour productivities MPL1 and MPL2 B MPL1=MPL2 for marginal labour productivities MPL1 and MPL2 C the wage w is given by w=MPL1/MPL2 D the wage w is given by w=P1/P2Jason Stilton is the chief executive officer of RightLiving a company that buys life insurance policies at a discount from terminally ill persons and sells the policies to investors for 85% of the value of the future benefit. The patients recieve the cash to use for medical and other expenses and the investors are guaranteed a positive return on thier investment. The diffreance between the purchace and sale prices is the RightLivinf Profit. Stilton is aware that some sick patients may obtain insurance policies through fraud (Not revealing thier illness on the insurance application). An insurance company that discovers such will cancel the policy and refuse to pay. Stilton beleives that most of the policies he has purchased are legitimate, but he knows some are probably not. Question Using IDDR approch, discuss the decision process Stilton should use in deciding whether to disclose the risk of fraudulent policies to potential investors.
- 1) Consider observable effort. Assume that if the Agent does not accept the wage the Principal offers his outside option gives him a net utility of v =2. The probability of high profit under e=1 is %, the probability of high profit under low effort is 1/4. Calculate the minimum wage that the agent will accept to work and supply the asked effort when the Principal asks him to supply e=0, and e=1. Let us call these wages wo and wi. Now, assume that instead of offering him a flat wage, the Principal is offering the agent a wage schedule (, w) where the agent receives when the (gross) profit is High and w when the (gross) profit is low. Calculate all the lowest cost wage schedules the agent will accept to supply e=1, and e=D0. Does the principal's expected net profit change when he pays the minimum cost wage schedule instead of the flat wage minimum cost wage? Explain the intuition for your answer.this question requires you to solve and a man model algebraically letting PV the price of the product supposed to demand at supply functions for the same product are given by.. plot the demand and supply curvestyped please 3.12 CES utility with weights a. Show that the CES function 46 + ото 8 is homothetic. How does the MRS depend on the ratio y/x? b. Show that your results from part (a) agree with our discussion of the cases 8 = 1 (perfect substitutes) and 8 = 0 (Cobb-Douglas). = c. Show that the MRS is strictly diminishing for all values of 8 < 1. d. Show that if x = y, the MRS for this function depends only on the relative sizes of a and B. e. Calculate the MRS for this function when y/x = 0.9 and y/x 1.1 for the two cases 8 = 0.5 and 8 = -1. What do you conclude about the extent to which the MRS changes in the vicinity of x y? How would you interpret this geometrically? =