The nationwide COVID-19 lockdown in March 2020 resulted in a decline in spending on travel services, restaurants,and recreation as they were no longer accessible. Asconsumers spent more time at home, household consumption shifted to goods such as food, furnishings, andalcohol, with increases in the use of online platforms for theirpurchases. The gradual reopening of the economy and international borders sawhousehold consumption recover as supply and demand for discretionary servicesresumed.Suppose the Consumption function of an individual is as follows:C = CO + b YdWhere C = Consumption functionCO=Autonomous Consumptionb =Marginal Propensity to consumeYd = Disposable incomea. Illustrate the effect of change in wealth on Consumption Function.b. Illustrate the effect of a change in expected future income on ConsumptionFunction.c. Illustrate the effect of a change in the real interest rate on the ConsumptionFunction

Answered: The nationwide COVID-19 lockdown in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ariya likes to play golf. The number of times per year that she plays depends on both the price of playing a round of golf as well as Ariya's income and the cost of other types of entertainment-in particular, how much it costs to go see a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Ariya will demand at each price under three different scenarios. In scenario D1, Ariya's income is $80,0o00 per year and movies cost $15 each. In scenario D2, Ariya's income is also $80,000 per year, but the price of seeing a movie rises to $17. And in scenario D3, Ariya's income goes up to $100,000 per year, while movies cost $17. Scenario D1 D2 D3 Income per year $80,000 $80.000 $100,000 Price of movie ticket $15 $17 $17 Price of Golf Quantity Demanded $55 15 10 15 $40 25 15 30 $25 40 20 50 Instructions: Round your answers to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of…
= Suppose you are trying to minimize your expenditures E utility level (20.5 + x9.5)² = 175. 4x1 + 3x2 subject to the target maximum • Set up the Lagrangean function for this expenditure-minimization problem with constraint • Compute for the expenditure minimizing quantities of ₁ and ₂. x2. • What is the minimum expenditure you can incur given the level of utility you have to attain?
suppose the government of a desert community wants to punish excessive water useage, where "excessive" is defined as any usage greater than 100 gallons/week. to do this, the government paces a flat $100 income tax on anyone who consumes more than 100 gallons/week of water in any given week (so this tax could theoretically be levied 52 times per year). people who use less than 100 gallons of water each week will not face this $100 special tax. For these problems, consider the decisions between water consumption, X(sub)w and consumption of a composite good, X(sub)c, where P(sub)w =$2/gallon and the composite good's price is numeraire. suppose michael lives in this desert community and has a weekly income of $1000. 1. graphing michels budget contraint over (X(sub)w , X(sub)c) bundles, what is the slope of his budget conraint for bundles containing MORE than 100 gallons of water? 2. What is the slope of michaels budget constraint at the point (X(sub)w, X(sub)c)=(100,750)? 3. what is the…
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Suppose you are on a three-day trip to Rome (from Monday to Wednesday) and during your stay you decide to consume only Waffle and Ravioli (measured on the horizontal and vertical axes respectively). You have a given amount of money (some constant) to spend on each of the three days. Suppose that the price of Waffle rises between Monday and Tuesday. If your optimum points of consumption on Monday and Tuesday are respectively called M and T, such that M to the left of T, what does it say about both the commodities? Illustrate your answer using an appropriate diagram.
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