A family of four has an income of $15,000 today and will earn $24,000 tomorrow. If the family consumes $11,500 in the first period and $15,000 in the second period, what is the interest rate.
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A family of four has an income of $15,000 today and will earn $24,000 tomorrow.
If the family consumes $11,500 in the first period and $15,000 in the second period, what is the interest rate.
(this question deals with intertemporal choice from
(also I am seeking the formula to find the interest rate)
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- 3. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. Supply Demand 100 200 300 400 500 LOANABLE FUNDS (Billions of dollars) A INTEREST RATE (Percent) m 0 0 600Suppose that the least amount of goods and services that Jim will consume in a year is $40,000. Jim tends to save $0.30 of every dollar of disposable income that he makes. Use the given line to graph Jim's consumption function for disposable income levels between $0 and $200,000. Move each endpoint to the appropriate spot on the graph.Rich's Opportunities. Rich has no nonlabor income, and suppose the price of consumption is $1 per unit. Rich earns $15 per hour, and he has 16 hours in the day to allocate between working and leisure time. The figure be depicts his budget line. consumption (units/day) 240 210 180 150 120 90 60 30 0. 21 4. 6. 8. 10 12 14 16 leisure (hours/day) Rich is thrilled to learn that his folks will give him a $10 daily allowance starting tomorrow. What happens to Rich's opportunities tomorrow? O a. Rich's endowment point shifts left $10. Ob. His budget line shifts up 10 units of consumption per day. O c. The slope of Rich's budget line increases (in absolute value) $10 per day. O d. The slope of Rich's budget line decreases (in absolute value) $10 per hour.
- Homework (Ch 02) The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production purchase in product markets. Based on this model, firms earn revenue when Suppose Lucia earns $550 per week working as a corporate attorney for Rowan and Martin Associates. She uses $10 to buy a box of aspirin at Pillmart F11 F12 F7 F10 F8 F9 26 2 Fn LockA family with a monthly income of $2200 spends $850 for rent $225 for utilities and $325 for food. What percent of the family income is spent for cach?25 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, $9, $3, $2, and $6 and that Ricardo has an income of $71. Column 1 Column 2 Column 3 Column 4 Column 5 Units of Good A Units of Units of Units of MU MU MU MU Good B Good C Good D Number of Dollars Saved MU 1 72 1 24 1 15 1 36 1 5 2 54 2 15 2 12 2 30 2 4 3 45 3 12 3 8 3 24 3 3 4 36 4 9 4 7 4 18 4 2 5 27 5 7 5 5 5 13 5 1 6 18 6 5 6 4 6 7 6 0.50 7 15 7 2 7 3.5 7 4 7 0.25 8 12 8 1 8 3 8 2 8 0.13 Instructions: Enter your answers as a whole number. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? 4 units of A 3 units of B units of C units of D b. How many dollars will Ricardo choose to save?
- [Related to Solved Problem 10.4 on page 330] In an article in the Quarterly Journal of Economics, Ted O’Donoghue and Matthew Rabin make the following observation: “People have self-control problems caused by a tendency to pursue immediate gratification in a way that their ‘longrun selves’ do not appreciate.” What do they mean by a person’s “long-run self ”? Give two examples of people pursuing immediate gratification that their long-run selves would not appreciate. Based on Ted O’Donoghue and Matthew Rabin, “Choice and Procrastination,” Quarterly Journal of Economics, February 2001, pp. 125–126.(Saving,investment) is the source of the demand for loanable funds. As the interest rate falls, the quantity of loanable funds demanded (decreases, increase). Suppose the interest rate is 4.5%. Based on the previous graph, the quantity of loanable funds supplied is (greater,less) than the quantity of loans demanded, resulting in a (surplus,shortage) of loanable funds. This would encourage lenders to (raise,lower) the interest rates they charge, thereby (increasing, decreasing) the quantity of loanable funds supplied and (increasing, decreasing) the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of ______%.Robots at Kroger, Walmart, and Whole Foods The grocery industry is stepping up its investment in robot technology. Retailers are spending an estimated $3.6 billion in robot technology globally, and are expected to invest $12 billion by 2023. Source: Forbes, July 29, 2019 Explain how the widespread use of farm robots will change the rental rate of farm land. www. Q Search Most likely, the widespread use of retailers' robots will OA. decrease the value of marginal product of mall land will decrease OB. not change, the prices of the retail goods will not change OC. increase, the quantity of land used for malls will decrease OD. not change; the quantity of land used for malls will increase the rental rate of mall land because Next
- 1E. In the Modern Farmer, July 28, 2016, Dan Nosowitz, writes “There are many reasons to buy directly from farmers (at farmers markets or though CSAS)–higher quality produce, faster delivery times, supporting small farmers-but one that isn't too well-understood is this exchange's impact on the local economy. A new study from University at California Davis looked at the way buying directly from farmers affects the economy in the Sacramento, California, area . Buying directly from farmers has a disproportionately large impact on the local economy." This is an example of the at work in a local economy. RMERS MARKET OPEN TODAY 1 F. What is the difference between "real" and "nominal" whether it is real GDP or nominal GDP . real income or nominal income . real interest rate or nominal interest rate?Economics Michelle is a saver, and consumption in period 1 is a normal good. If there is an increase in the interest rate: Group of answer choices Both the substitution and income effects will decrease consumption in period 1. Cannot be determined without additional information. The substitution effect will increase consumption in period 1, whereas the income effect will decrease it. Both the substitution and income effects will increase consumption in period 1. The substitution effect will decrease consumption in period 1, whereas the income effect will increase it.