QUESTION 1An individual lives for two periods and decides how much to consume in each period.- In the first period his consumption equals C1 and his income Y1 = 200- In the second period his consumption equals C2 and his income Y2 = 100He can save or borrow money in the first period to finance his consumption in the second period.The interest rate he gets in case he saves or has to pay in case he borrows money equals 7%.Determine the budget constraint of this individual.C2 = −0.935·C1 +314C2 =−1.07·C1 +314C2 =−0.8·C1 +314C2 =−1.08·C1 +314QUESTION 2The total production of a good y is determined by the production function y = 3L2/3K1/3, where L is labour input and K capital input.The reward (factor prices) for labour and capital are, l = 27 en r = 2, respectively.The producer needs to produce 9000 units of good y.How much units of labour will he hire if he wants to miminize his total costs?1587,4839,953000515,23QUESTION 3A good is traded on a perfectly competitive market.Demand D is given by: D = 100 - pand supply S by: S = 3pp is the price of the good.What is the equilibrium price?5152535 QUESTION 1An individual lives for two periods and decides how much to consume in each period.In the first period his consumption equals C1 and his income Y1 = 200In the second period his consumption equals C2 and his income Y2 = 100He can save or borrow money in the first period to finance his consumption in the second period.The interest rate he gets in case he saves or has to pay in case he borrows money equals 7%.Determine the budget constraint of this individual.C2 = -0.935-C1 +314C2 -1.07.C1 +314C2 =-0.8-C1 +314C2 -1.08.C1 +314QUESTION 2The total production of a good y is determined by the production function y = 3L2/3K1/3, where L is labour input and K capital input.The reward (factor prices) for labour and capital are, I = 27 en r = 2, respectively.The producer needs to produce 9000 units of good y.How much units of labour will he hire if he wants to miminize his total costs?O 1587,4839,953000515,23QUESTION 3A good is traded on a perfectly competitive market.Demand D is given by: D = 100 - pand supply S by: S = 3pp is the price of the good.What is the equilibrium price?5152535

A budget constraint is a visual representation of the maximum level of consumption or expenditure…

Answered: QUESTION 1 An individual lives for two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 1

An individual lives for two periods and decides how much to consume in each period.
- In the first period his consumption equals C1 and his income Y1 = 200
- In the second period his consumption equals C2 and his income Y2 = 100

He can save or borrow money in the first period to finance his consumption in the second period.
The interest rate he gets in case he saves or has to pay in case he borrows money equals 7%.

Determine the budget constraint of this individual.

C2 = −0.935·C1 +314
C2 =−1.07·C1 +314
C2 =−0.8·C1 +314
C2 =−1.08·C1 +314

QUESTION 2

The total production of a good y is determined by the production function y = 3L2/3K1/3, where L is labour input and K capital input.
The reward (factor prices) for labour and capital are, l = 27 en r = 2, respectively.
The producer needs to produce 9000 units of good y.

How much units of labour will he hire if he wants to miminize his total costs?

1587,4
839,95
3000
515,23

QUESTION 3

A good is traded on a perfectly competitive market.
Demand D is given by: D = 100 - p
and supply S by: S = 3p
p is the price of the good.

What is the equilibrium price?

5
15
25
35

QUESTION 1
An individual lives for two periods and decides how much to consume in each period.
In the first period his consumption equals C1 and his income Y1 = 200
In the second period his consumption equals C2 and his income Y2 = 100
He can save or borrow money in the first period to finance his consumption in the second period.
The interest rate he gets in case he saves or has to pay in case he borrows money equals 7%.
Determine the budget constraint of this individual.
C2 = -0.935-C1 +314
C2 -1.07.C1 +314
C2 =-0.8-C1 +314
C2 -1.08.C1 +314
QUESTION 2
The total production of a good y is determined by the production function y = 3L2/3K1/3, where L is labour input and K capital input.
The reward (factor prices) for labour and capital are, I = 27 en r = 2, respectively.
The producer needs to produce 9000 units of good y.
How much units of labour will he hire if he wants to miminize his total costs?
O 1587,4
839,95
3000
515,23
QUESTION 3
A good is traded on a perfectly competitive market.
Demand D is given by: D = 100 - p
and supply S by: S = 3p
p is the price of the good.
What is the equilibrium price?
5
15
25
35

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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