9. Suppose the economy is characterized by the following behavioral equations: C=co+c₁YD YD=Y-T I = bo + b、Y where co=480, c₁ = 0.5, to= 80, t₁ = 0.25, G = 120, bo=200, and b₁ = 0.25. What is the (income) multiplier for this economy? a. 4 b. 3 c. 2 d. 1 e. All of the answers here are incorrect

9. Suppose the economy is characterized by the following behavioral equations: C=co+c₁YD YD=Y-T I = bo + b、Y where co=480, c₁ = 0.5, to= 80, t₁ = 0.25, G = 120, bo=200, and b₁ = 0.25. What is the (income) multiplier for this economy? a. 4 b. 3 c. 2 d. 1 e. All of the answers here are incorrect

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 9RQ: If people do not have a complete mental picture of total utility for every level of consumption, how...

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3 Use Lagrange multipliers to find expressions for x, and x, which maximize the utility function U =x}? + x}? subject to the general budgetary constraint Px, + Px, = M
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Elements of Mathematical Economics
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3. Utility maximization under constraint, substitution and income effect, CV and EV Josh gets utility (satisfaction) from two goods, A and B, according to the utility function U(A, B) = 5A/4B³/4. While Josh would like to consume as much as possible he is limited by his income. a. Maximize Josh's utility subject to the budget constraint using the Lagrangean method. b. Suppose Pa increase. Show graphically the income, substitution effect and total effect and explain. c. Suppose PA increase. Show the graph for CV and EV and explain.
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Exercise 5. There are observed following behavioral equations in the economy: C = Co + c(Y-T) 1 = 1o - WR G = Go T = To where: Co > 0, lo > 0, Go > 0, To > 0, ce (0; 1), w > 0. Solve following problems: a) Find IS Curve b) Present graphically how change in government spending affects economy c) Present graphically how change in autonomous tax affects economy d) There is budget deficit in the economy. Government is able to reduce deficit either by increasing taxes or by reducing government spending. Explain, which instrument should be used to reduce budget deficit? e) Government is able to change either taxes or government spending. Which instrument should be used if government tends to increase aggregate income?
Sarah has a budget of 58. Her utility function if U(x,y) = x*y. %3D The price of good x is 1, the price of good y is 8. How many units of good x does Sarah consume? Answer: Type here to search 01/
Columns 1 through 4 in the following table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has an income of $106. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
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