The HO model is based on four key relationships: between factor prices and commodity prices, between goods prices and outputs, between goods prices and factor returns, and lastly between factor endowments and outputs. Clearly Explain.
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The HO model is based on four key relationships: between factor
commodity prices, between goods prices and outputs, between goods prices and factor returns, and lastly between factor endowments and outputs.
Clearly Explain.
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- Consider the claim that the market interaction of individually rational agents leads to an outcome that is socially rational. Address the following questions: In what sense is the above claim true? Explain what means that agents are individually rational and that the market outcome is socially rational as part of your answer. Identify at least two essential conditions that a market must satisfy for the claim to be true. (i.e.: the conditions must be necessary and sufficient for the claim to be true). Explain why the claim should be true when these two conditions are satisfied. Explain why the claim would no longer be true for markets that do not satisfy these two conditions, separately focusing on each one of the cases in which the claim is not true. For those cases in which the claim is not true, describe government interventions that may help the market outcome to become socially rational in some sense.Roger's World of Pets is considering adding cat grooming to the array of goods and services he currently provides. He estimates that consumers would be willing to pay $25 per cat for a 1 hr. cat grooming appointment. He also estimates that he would need 2 workers per cat (1 to hold the cat down and the other to groom the cat). Wages in this labor market are $15/hr. Using marginal analysis, Roger should: introduce cat grooming. do not offer cat grooming be on the fence ("indifferent") about introducing cat grooming. be unable to tell whether cat grooming is a good idea because we don't know how much he pays in rent for his shop.A household has an endowment of 1 unit of time .The household maximises its utility u = In(c) + b In(1 – 1), where c denotes consumption and l e (0, 1] denotes time spent working. It finances its consumption from labour income wl, where w is the market wage rate per unit of labour time. If the market wage rate goes up, then equilibrium labour supply of the houschold a) Increases b) Decreases c) Remains constant d) Changes in ambiguous manner
- What is the difference between walrasian and hicksian demand curves. Fully explain with reference to their properties and those of the utility and expenditure functions.Consider the Edgeworth Box illustrated in the figure to the right. I and I, are individual j's indifference curves and I, and are individual d's indifference curves. Bundle e represents the initial endowment. Explain why point e in the figure to the right is not on the contract curve. Bundle e is not on the contract curve because Contract curve O A. the consumers' marginal rates of substitution are equal at bundle e. O B. both consumers can be made better off if consumerj trades wood for candy with consumer d. O C. the consumers' indifference curves are tangent at bundle e. O D. one party cannot be made better off without harming the other from trade. O E. both consumers can be made better off if consumer i trades candy for wood with consumer d. e CandyNow,suppose N=3 with a market clearing interest rate. The first two agents are the same as earlier. The third agent has an endowment of 20 in the first period and consumes 15 in the second period. If the first two agents each consumed 21 units in the first period, how much did the third agent consume in the first period? Plz do fast
- QUESTION 35 Following from the model described in the previous question. What is the budgt constraint facing the individual, and what is the optimal condition for individual choices of consumption and fertility? 1 The budget constraint is wt- pn; = C;i The optimal condition is Ct pnt 1 The budget constraint is w, -p= C;; The optimal condition is Ct nt 1 The budget constraint is Wt-p3 Ct; The optimal condition is Ct %3D The budget constraint.is w -p-n;= C; The optimal condition is Ct = Opn;The COVID pandemic has changed where many people are able to do their work at the city or metro-area level. Which of the following best describes the predictions from a Rosen-Roback style model on how separating work (in the model, wage) from location of residence might impact house prices across different areas. O This should put upward pressure on house prices (and population) in traditionally high-wage areas, and downward pressure on house prices (and population) in traditionally high amenity areas. O This should put downward pressure on house prices (and population) in traditionally high-wage areas, and upward pressure on house prices (and population) in traditionally high amenity areas. O This should put upward pressure on house prices across all areas, regardless of the initial factors associated with that area. O This should put downward pressure on house prices across all areas, regardless of the initial factors associated with that area.Please indicate whether the statement is true, false, or uncertain for each of the following two statements, and explain why. If the statement has two parts, or partly true and partly wrong, explain both. The evaluation of your answer focuses on the quality of your explanation. Given the following information: A fundamental feature of a market economy is that no consumer is forced to buy a specific number of units of a product—each consumer is free to decide not to buy if the consumer thinks that the price is too high. Statement to evaluate: This fundamental feature substantially weakens the economic case for the government to regulate the price charged by a monopoly for its product. [In your answer, assume that there are no externalities from this product, and there is no asymmetric information.]
- Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when purchase in factor markets. Suppose Ana earns $500 per week working as an analyst for A-Plus Accountants. She uses $10 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Yakov $375 per week to wash cars. Yakov uses $125 to purchase tax services from A-Plus Accountants. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Ana spends $10 to get her car washed. Ana earns $500 per week working for A-Plus Accountants. Yakov earns $375 per week working for Spotless Car Wash. Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply. O Ana's labor O The car wash Ana receives O The $125 Yakov spends to purchase tax services from A-Plus Accountants O The $375 per week…Based on this model, firms earn revenue when Suppose Teresa earns $750 per week working as a pilot for Wingies. She uses $10 to take a yoga class at Big Bend. Big Bend pays Sam $475 per week to instruct yoga. Sam uses $350 to purchase international flights from Wingles. Event purchase Identify whether each of the following events in this scenario occurs in the factor market or the product market. Sam earns $475 per week working for Big Bend. Teresa spends $10 to take a yoga class. Teresa earns $750 per week working for Wingies. Factor Market Product Market in product markets. The $475 per week Sam earns working for Big Bend O Teresa's labor Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply. The yoga class Teresa receives The $350 Sam spends to purchase international flights from WingiesConsider an Edgeworth box economy, where preferences and endowments are given by. ( attached below ) In the following, use the normalization p2 = 1.(a) Find all the Pareto optimal allocations (use x1 to parameterize thePO allocations). (b) Suppose the government wants individual 1 to have the bundle x1 = (5, 9). Show whether the government can induce this outcome an equilib- rium with transfers. Find the supporting prices and transfers if possible. (c) State the Second Fundamental Theorem of Welfare and explain how the result in part (b) relates to that theorem. (d) Suppose the government does not care what bundle individual 1 gets and only wants to ensure that the individual 1 receives utility level equal to 45. Show whether this can be achieved as an equilibrium with transfers. Find the supporting prices and transfers if possible.
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