Q: Describe some government intervention in the economy with the intent of controlling prices. Identify…
A: Government intervention is defined as any action taken by the government that affects the market…
Q: We know that n differentiable functions x₁(p, m), ..., xn(p,m) of prices and income are generated by…
A:
Q: A retrofitted heating system is being considered for a small office building. The system can be…
A: Finding the present value of all future cash projected within a given period, assuming a particular…
Q: The rate at which a consumer is able to substitute one good for another is determined by the…
A: In economics, the marginal rate of substitution (MRS) refers to a rate at which a consumer will be…
Q: What could cause the following shift? Increase in GDP. O Expansionary fiscal policy. O Decrease in…
A: The interest rate is determined through the equilibrium in the goods and money market. The such…
Q: Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good…
A: Given, Good 1 is Normal and Good 2 is Inferior. Which implies that as income increase the demand…
Q: Refer to Figure 17.1. Which of the following causes the ppf to shift from ppf2 to ppf1? Group…
A: On a production potential frontier, the maximum output combinations of two different goods or…
Q: Use an aggregate demand and supply diagram to illustrate and explain the following will affect the…
A: In the aggregate demand-aggregate supply model, short-run equilibrium occurs at such a price level…
Q: table below shows cost data for producing different amounts of saucepans. Suppo the information in…
A: The marginal revenue is the change in the total revenue when the one additional unit of output is…
Q: The Canadian government provides subsidies to diaper manufacturers to produce biodegradable diapers…
A: Subsidy is the term used to describe government assistance or incentives given to producers to…
Q: 1. In the circular flow of financial activity surplus budget units are net lenders of funds while…
A: The circular flow model illustrates how money circulates in an infinite cycle from producers to…
Q: As usual, goods 1 and 2 are perfectly divisible, meaning that ₁ and ₂ can take on any nonnegative…
A: U = (x1x2)0.5 - 2-x3
Q: 1
A: Price index Using a series of statistics to compare the amounts for just about any two time periods…
Q: Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good…
A: According to the question, Good 1 is a normal good and Good 2 is inferior which states that as if…
Q: 2. Initially, PH = 40 CH, PF = 60 CF and E= 2 CH/CF. Then, they changed to PH = 30 CH, PF = 20 cF…
A: Here we are given the price in the 2 countries and a nominal exchange rate. And based on that we…
Q: Consider the following table that shows hypothetical purchases made over the last year in the United…
A:
Q: Which of the following will initially result from an increase in the market demand for hot dogs?…
A: Equilibrium is where demand equals supply. At this equilibrium point , total surplus is maximized.
Q: Consider the following end of year prices, rounded to a dollar of DGT (SPDR Global Dow) – 150…
A: Introduction The mean is calculated as the average value of the sample. Standard deviation measure…
Q: The following table provides information on the price, quantity, and average cost for a monopoly. At…
A: In economics, profit maximization is the short run or long run process by which a firm may determine…
Q: How should the situation be rectified to return to full employment
A: When discussing short-term changes in aggregate demand or supply, it can be claimed that these…
Q: Consider a uniform series of cash flows. The first cash flow of $10,000 occurs at time 10 and the…
A: Present value is the value of cash flows in todays dollar. Future worth is the value of cash flow…
Q: This week, XYZ company made 425 chairs and sold them at a price of $69 per chair. Calculate XYZ's…
A: The total opportunity cost of production of a commodity alludes to the total cost that the producer…
Q: Real-Time Data Analysis Exercise* *Real-time data provided by Federal Reserve Economic Data (FRED),…
A: M1 money supply incorporates those monies that are very liquid like cash, checkable (demand)…
Q: 8. Suppose a firm has following total cost function: TC=900+4Q+Q². Find the fixed cost (FC), total…
A: The total cost involve in the process of production is the sum of the total fixed cost and total…
Q: Assume that no banks hold excess reserves, and the public holds no currency. If a bank sells a R100…
A: A country's banking system is referred to be a structural network of institutions that deliver…
Q: - 1.7. In Section 1.2.B, we analyzed the Bertrand duopoly model with differentiated products. The…
A: Demand function : qi = a - pi (When pi < pj ) qi = 0 (when pi > pj ) qi = (a-pi )/2…
Q: The government increased military spending, leading to reports that prices charged by military…
A: The law of increasing opportunity cost states that when more and more of a limited resource are put…
Q: Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good…
A: Here we can see that good 1 is normal and good 2 is inferior. Which implies that as income increase…
Q: ate a table and graphs (a) Suppose we have preferer indifference curve through the bundle X = 30 and…
A: Utility function : U = 10 x2/3 y1/3 Budget Constraint : Px*x + Py*y = M Optimal consumption is…
Q: A sales position is offered at a pharmaceutical company with two salary options. Option A would pay…
A: Both options give us the total income earned. Hence, we equate both the Y's given to us and find the…
Q: Consider the average annual growth rate 3.51% of 2000-2005, forecast the nationals population in Abu…
A: Year Abu Dabi Nationals Non-nationals Total 1980 90792 361056 451848 1985 135982 430054…
Q: A consumer always purchases 2 units of X with every 3 units of Y regardless of the prices of X and…
A: Given The consumer always purchases 2 units of good X with every 3 units of good Y regardless of…
Q: Which of the following is unlikely to affect the rate of economic growth? Group of answer choices…
A: Economic growth is consistent rise in GDP level or output over period of time.
Q: The populations of Abu Dhabi (National, Non-National, and Total) and UAE are shown in the following…
A: Annual growth rate is the percentage increase in the population in the current year over the…
Q: When output and employment slowed in early 2008, the Bush administration and the Democratic Congress…
A: The various macroeconomic theories and models that attempt to explain how aggregate demand has a…
Q: The following is a report from a BLS survey taker: There were 90 people in the houses I visited. 20…
A: unemployment rate, percentage of unemployed individuals in an economy among individuals currently in…
Q: The data for five-kilo boxes of lobsters are given in the table below. Quantity Supplied (before…
A:
Q: A movement from Point D to Point C represents Group of answer choices economic decline. economic…
A: Meaning of Production Possibility Frontier: The term production possibility frontier refers to the…
Q: Which of the following is an investment in human capital? Group of answer choices An individual…
A: The nation's technology advancement increases the number of goods and services that can be produced…
Q: 21. In Italy, firms pay tax on reported profits at a constant proportionate rate t € (0, 1). If the…
A: Audited Probability = P Non-audited probability = (1-P) Tax reported without an audit = tr
Q: so the given answer is erronous?
A: A break-even point is utilised in numerous financial and business contexts. It is the production…
Q: Consider the insurance problem from class in which an agent with wealth w dollars faces a…
A: Utility function : U(x) = ln (x+1 ) Probable loss = l Probability of loss = π Probability of no…
Q: Show that if in R2 are continuous, highly monotonic preferences then indifference curves (i.e.…
A: 1.) Normative announcement expresses a value judgment about whether a scenario is ideal or…
Q: Question Compare the functions of the Federal Reserve district banks with those for the Board of…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: You produce quesadillas (Q) with beef (B) and cheese (C). The production process is as so: Q = 40B -…
A:
Q: Which of the following policies should the government NOT adopt if its goal is to enhance economic…
A: When talking about economic growth, it can be said that it is explained by an increase in the…
Q: also possesses a technology that allows him to costlessly convert any quantity of grapes into he…
A: Introduction Armando consumes two products: wine and grapes. He has access to technology that…
Q: Use the inflation indices table shown below to make the below listed conversions. Show all work…
A: The purpose of measuring inflation is to determine the overall effect of increases in price for a…
Q: 1. Define the following terms: production function, average product, marginal product, law of…
A: Note:- Since you have posted multiple subparts, as per the guidelines we can solve only first 3…
Q: machine and a manual feed machine for a finishing process. The auto feed machine has an initial cost…
A: Breakeven point is the point where firm only cover their variable cost of the production it means…
Answer question 2
Step by step
Solved in 2 steps
- A consumer has a budget of £12 to split between two goods: good 1 has a price of 2, good 2 has a price of 3. Write the consumer’s budget constraint algebraically. Convert this budget constraint into the formula for the budget line. Show this line on a suitably labelled graph. The consumer’s budget increases to £24. Show the effect of this change graphically. A consumer dislikes good 1, and dislikes good 2. Show these preferences on a suitably labelled graph with an indifference curve. Label the graph: which areas would be preferred to those on the line?1. Assume well behaved preferences for a consumer. If total income goes up, ceteris paribus what would be the impact on the Budget line? 2. Assume well behaved preferences for a consumer. If total price of good on Y axis goes up, ceteris paribus what would be the impact on the Budget line? 3. Differentiate between the concept of Income effect and Substitution effect in Price Decomposition1.a Assume that a person’s utility function is given by the following function: ??=3?^(2/3)?^(1/3) Assume also that the price of X is £3, and the price of Y is £3 and that the budget is £45. What is the optimal amount of goods X and Y that should be purchased with this budget? b) Assume now that the price of good X is PD, while all other conditions remain the same. Find the optimal amount of good X that should be purchased for a generic price PD. In other words, find the individual demand function for good X. 1.b Assume now that the price of good X is PD, while all other conditions remain the same. Find the optimal amount of good X that should be purchased for a generic price PD. In other words, find the individual demand function for good X.
- 3. Susan has the following utility function U(x,y) = xy, where x represents food and y represents other goods. Susan has £20 (budget m) to spend on these two goods. Suppose that the initial price of x (Px) is £1 per unit, and that of y (Py) is £1 per unit. Note that MUx=y and MUy=x. (i) How many units of x and y will Susan purchase? Assuming that Px varies and m and Py stay constant at the values £20 and £2, respectively, what is the individual demand function for x? (ii) What are the characteristics of the individual demand function for x? What is its aggregate counterpart, and what is its economic importance?3. Tony is throwing a party at his Fraternity and is trying to choose what booze to buy. A bottle of vodka has three times the alcohol as a six-pack of beer. Assume that Tony only cares about the total amount of alcohol in his basket. (use vodka on the X-axis and beer measured in six-pack on the Y-axis) a) Devise a utility function to represent these preferences. b) Suppose a bottle of vodka costs $40, a six-pack of beer costs $10, and the budget is $200. Write the budget constraint. c) Solve Tony's utility maximization problem and find the optimal combination. d) Suppose that a bottle of vodka cost has increased to $50. What will be his new optimal combination?1. Problems and Applications Q1 1. Effect on Budget Constraint 2. Effect on Optimum Maya divides her income between coffee and croissants (both of which are normal goods). Exceptionally good weather conditions in Brazil cause a large decrease in the price of coffee in the United States. Coffee On the following graph, show the effect of the good weather conditions on Maya's budget constraint (BC). STEP: 1 of 2 BC Croissants لمدة
- 1 Alice has a monthly lunch budget of 360 dollars which she spends on either burgers (B) or pizza (Z). The price of each pizza is 16. dollars and the price of each burger is 8 dollars. Alice's utility is given by: u(B, Z) = B'/2 +4Z!/2 + 47!/2 a) Find Alice's budget constraint. Set up the Lagrangian and find her optimal consumption. What is her new consumption if the price of burgers becomes 16 dollars?1. Use the budget constraint P_X + P_Y = M, thinking of good X as a food item and good Y x as other goods. Present an analysis where an increase in price of the food item causes the consumer to buy less food, demonstrating the "law of demand." b. Then, present a second analysis where an increase in the price of the food item causes the consumer to buy more of the food item, which is the Giffen Good case. Finally, identify two food items, one which you think fits the first case and one which you think fits the second case.2a) Sompa's utility function for strawberries and grapes is given by U (S, G) =10s?G'. Where S represents strawberries and G represents grapes. i. Write down Sompa's budget constraint. ii. What combination of strawberries and grapes maximises Sompa's utility if her income is GHC200, the price of strawberries is GHC 5per unit and the price of grapes is GHC 10 per unit? ii. What is Sompa's total utility (satisfaction)? iv. If the price of strawberries increases to GHC15 per unit and the price of grapes and Sompa's income remain the same, discuss briefly what Sompa will have to do to maximize her satisfaction. b) Supposing strawberries was a giffen good, derive the demand curve for strawberries with this increase in price. c) Explain the notion that "on the basis of price changes goods can be classified into normal and giffen, and on the basis of income changes, goods can be classified into normal and inferior".
- 2. Utility function: U(X,Y)= 2XY* Budget Constraint: 2X +4Y = 80 a. Calculate the utility maximizing amount of X and Y.Draw YOUR indifference curve for the consumption of two goods (you pick the goods – be creative!) Make sure to include labels. Why did you choose these two goods? Why do you view these as being a tradeoff? Carefully explain why the indifference curve has the shape you created. (Hint: Discuss the slope. What it means and how it changes) Determine a budget that will be allocated towards your consumption of these two goods. Given the budget, prices for the goods, and your preferences, how will you find the utility-maximizing combination? Give an intuitive answer as well as a graphical answer (make sure to label the graph accordingly).Suppose you have $100 to spend on Skittles and M&Ms. The price of Skittles is $5.00 and the price of M&Msis $1.00.(a) Write the budget constraint and draw the budget constraint on a graph that has M&Ms on the verticalaxis. (b) Assuming you spend all of your money on skittles and M&Ms. If you bought 10 M&Ms how manySkittles did you purchase? (c) Suppose the price of skittles increases from $5.00 to $6.00. Rewrite the budget constrain and draw thenew budget line, including and indicating intercepts and the slopes. (d) Suppose the price of Skittles drops from $5.00 to $1.00. You are limited to only a maximum of 75skittles. Draw this new budget constraint on the same graph from your answers in part (a) and (c).