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- QUESTION 39 48 44 40 36 32 28 24 20 16 12 O 8 4 E.Q a) 12 b) 20 c) 24 d) 30 0 8 16 24 39. The shift from AE1 to AE2 will cause equilibrium income to change to: 32 40 Q AE2 AE1/2. Given: C = 250 + 0.8 Y I= 150 G = 300 TR = 100 (3+3+3+4+3+3+4=23) NX = 100 t =0.25 i) Find the equilibrium level of income. ii) Suppose, because of the current COVID 19 situation C falls to 50, MPS falls to .05, I falls to 10, G falls to 100 and NX falls to 10. How much TR should the government increase to have the same level of equilibrium income as in part i)? iii) In determining the required change in TR in part ii), which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVID 19 situation in selecting the multiplier).
- interpret the relationship of both elasticities from each otherJane insists on consuming 4 bowls of yogurt with 2 bananas. If the price of banana is $1 per unit and the price of yogurt is $1 per bowl, then if Jane income is $m, the slope of the Engel curve for bananas will be (a) negatíve and constant. (b) negative and increasing. (c) zero. (d) positive and constant. (e) None of the above.Practise please help
- Task 5: Consumption as young and consumption as old Now suppose Mary is thinking about her retirement and wants to understand how much to save. Today she can either con- sume or save for retirement. During her young, working life she will make 100.000 euros. Thus, her current budget constraint is Cy + S = 100.000. In her retirement she has no income, only the amount she saved as young. She can save at a rate of (1+r). So, her budget constraint as old is Co = (1+r)S. (a) Write Mary's lifetime budget constraint as plot it in a graph. Tip: Solve for savings while old and substitute in the young budget constraint. (b) Mary's utility from consumption as young and consumption as old is U(Cy,Co) = 1-0 Solve Mary's maximization problem. What is the MRS and the MRT? (c) Suppose Mary wins the lottery while young. What is the effect on her optimal decision for consumption as young and as old? (d) The local bank decided to increase the interest rate on savings. Discuss the effect of this increase…Givens: mar T1 2 0, x2 > 0 s.t. 8* + 4* T2 <1600 • The marginal utility of good 1: MU = 25 • The marginal utility of good 2: MU, = .75 * Equation Description: A consumer is attempting to maximize utility subject to a budget constraint. Utility equals the product of two terms: the first term is units of good 1 raised to the .25 power; and, the second term is units of good 2 raised to the .75 power. The price per unit of good 1 is $8; the price per unit of good 2 is $4: and, consumer income is $1600. Marginal utility of good 1 equals the product of three terms: the first term is .25; the second term is units of good 2 raised to the !75 power; the third term is units of good 1 raised to the -75 power. Marginal utility of good 2 equals the product of three terms: the first term is .75: the second term is units of good 1 raised to the .25 power; the third term is units of good 2 raised to the -.25 power. Question: What is the highest level of utility the consumer can achieve? O 150 utils O…Teresa spends her entire scholarship of PLN 600 for the purchase of drinks and food. 1. Draw Teresa's budget restraint line knowing that her favorite drink costs 5 zlotys per bottle and the dinner price is 20 zlotys. 2. How will Teresa's situation be affected by the increase in dinner price to PLN 25? 3. What will happen if the price of the drink is reduced to PLN 2.5? 4. Assess following quantitative combinations: •125 drinks i 20 dinners •80 drinks i 20 dinners •40 drinks i 20 dinnes
- Quantity of D 10 8 N 0 to 2 000 Refer to the budget line shown in the diagram. The absolute value of the slope of the budget line is Multiple Choice 4 6 8 10 Quantity of C two. one-half. five. ten. 20 10,981 AUG 22 < Prev 7 of 12 átv (@What is the dependent and independent variable when the household-level annual demand of water is modeled? water demand water generation for households price of relevant inputs price of water What theory is this economic phenomenon? Demand or Consumption utility theoryThe manager of a Cape Town superette carries a stock of Jive soft drinks. The countryexperiences an economic recession which yields an anticipated consumer income decrease of6 %. As a result, the income elasticity of demand for this product is estimated to be –2.5.(a) Calculate the percentage change in the quantity of your soft drink orders required toaccommodate the new demand without a surplus or shortage of inventory. [3](b) What does the elasticity coefficient of –2.5 reveal? [3]