13. Consider the case of two tourists visiting Charlottetown. One is from Montreal, and the other is from Summerside (PEI). a) How will the spending of each of these tourists affect the GDP of PEI? (be specific) b) Which of these tourists (all else equal) is likely to have a larger impact on the GDP of PEI? c) Will the multiplier effects be different for these tourists?
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- 3) Suppose the economy is closed and is characterized by the following behavioral equations: C=C₁₂ +G₁Y₂ Y₂=Y-T 1=b₂ + b₂Y a. Government spending and taxes are constant. Solve for the equilibrium output. b. What is the value of the multiplier? How does the relationship between investment and output affect the value of the multiplier as compared to the case when investment was exogenous? For the multiplier to be positive what condition must ( + b) satisfy? Explain your answers? bo C. Suppose that the parameter sometimes called business confidence, increases. How will the equilibrium output be affected? Will investment change by more or less than the change in bo? 'Why? What will happen to national saving?1. Consider the winter activity of skiing. Assume that the rental cost of ski equipment is $120 and the lift ticket costs $66. If you go skiing, you would wear the ski jacket you purchased last year for $190. If you do not go skiing, you could either work at your part-time job, which would earn you $101, or study at the library, which you value at $28. Suppose that you were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is the opportunity cost of going skiing? Enter a whole number and no dollar sign. 2. Country A and country B both produce toasters and sweaters. In country A each worker in a day can produce either 5 toasters or 20 sweaters. In country B each worker in a day can produce either 3 toasters of 18 sweaters. Each country has constant opportunity cost of production and each has 100 workers. Enter whole numbers in each blank. Initially the two countries do not trade. Country A allocates 60 workers to toaster production and…4. The following data pertain to products A and B, both of which are purchased by Jay. Initially, the prices of the products and quantities consumed are: PA = $10; QA = 3; PB = $10; QB = 7 Jay has $100 to spend. After a reduction in price of B, the prices and quantities consumed are: PA = $10; QA = 2:5; PB = $5; QB = 15 Assume that Jay maximizes utility under both price conditions above. Also, note that if after the price reduction enough income were taken away from Jay to put him back on the original indifference curve, he would consume this combination of A and B: QA 1:5; QB = 9 Determine the change in consumption of good B due to the (1) the substitution effect and (2) the income effect using Hicks decomposition.
- 7. Models: Apply the supply-and-demand model to the following markets. In each case, state the key endogenous variables in the market as well as some important exogenous variables or parameters. Also, express each model as a system of mathematical equations. As an example, Q = F(P, X) might be the demand curve in the computer market, where X captures some exogenous variables like the availability of the iPad or computer games. How many equations are there within each example? How many unknowns? 1. The computer market. 2. The market for your favorite music. 3. The market for a particular currency, such as the dollar, the yen, or the euro. (Hint: This last example suggests an important point about "exogenous variables": what is exogenous in one model, as in a narrow study of the supply and demand for dollars, may be endogenous in a richer model-like a study of the entire U.S. macroeconomy.)4) Suppose the economy is closed and is characterized by the following behavioral equations: a. b. C. d. C=C₂+GY₂ Y₂ = Y-T 1=b₂ + b₂Y Government spending and taxes are constant. Suppose that consumers decide to consume less (and therefore to save more) for any given amount of disposable income. Specifically assume that consumer confidence () falls. What will happen to output? As a result of the effect on output you determined in part (a), what will happen to investment? What will happen to public saving? What will happen to private saving? Explain. What is the effect on consumption? Suppose that consumers had decided to increase consumption expenditure, so that Co had increased. What would have been the effect on output, investment, and private saving in this case? Explain. What would have been the effect on consumption? Comment on the following logic: "when output is too low, what is needed is an increase in demand for goods and services. Investment is one component of demand, and…Often, Americans are surprised to learn that _______ of the value of U.S. consumption comes from other countries. A) about 30 percent B) about 35 percent C) about 15 percent D) about 25 percent E) about 20 percent
- You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)5. Consider the following is the economy of Country Z: C = 200 + 0.85Y I = 100 Answer the following questions: (a) Calculate the equilibrium level of output algebraically using the saving-investment (S-I) approach. (b) What is the value of saving at the equilibrium output from part (a)? (c) Suppose the investment increases to 200. What is the new equilibrium level of output? Calculate the value using the multiplier approach.(7 points) Suppose Backbeat BBQ, Dave Grohl's one-man catering company, offers two types of membership plans. Plan A has an entry fee of $20 with a price of $2 per unit. Plan B has an entry fee of $40 with a price of $1 per unit for using the service. Let x be expenditure on all other goods and y be the units of consumption of Backbeat BBQ's services, and suppose you have an income of $100. A. Write down the budget equation that you would have after you paid the entry fee for each of the two plans. B. If your utility function is xy, how much y would you choose in each case? C. Which plan would you prefer? Explain.
- 6. All other things constant or nothing else changes Juanita is a research assistant for her favorite biology professor, Dr. Ogechi. Dr. Ogechi is interested in studying the effects of feeding a certain chemical to rats to see how it affects their appetites. Juanita knows from her economics class that to isolate the effects of a particular phenomenon, all other things must remain the same. In Latin, this is referred to as In order to keep all other things the same and isolate the effects of one particular variable in the biology experiment, Juanita will want to do which of the following? Check all that apply. O Avoid drawing conclusions after one trial. O offer the same type of food to the rats in ead trial. O Make sure all tested rats are the same age.3. Suppose that you are interested in answering the question of how consumption reacts to tax increases. In recent years, government has imposed tax increases to fund increased infrastructure spending. If you could design an ideal experiment to answer this question, how would you do so? Do you think it would be practical to use this experiment on a large scale?I just need help on f g and h