Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 13, Problem 1P
A
To determine
The blank when the current consumption is more than the future consumption.
A
Expert Solution
Explanation of Solution
If Bryan values current consumption more than future consumption, he has a net − borrowing.
Economics Concept Introduction
Introduction:
An intertemporal choice means how the consumer chooses to consume a good in the various time periods.
Net- saver as the name suggests the consumer is saving a good in the current period in order to consume in future.
Net borrower which means the consumer chooses to consume a good in the current time period and borrow from the future with the cost of borrowing.
B
To determine
The blank with the name of the reward to household for forgoing current consumption.
B
Expert Solution
Explanation of Solution
The reward to households for foregoing current consumption is saving
Economics Concept Introduction
Introduction:
An intertemporal choice means how the consumer chooses to consume a good in the various time periods.
Net- saver as the name suggests the consumer is saving a good in the current period in order to consume in future.
Net borrower which means the consumer chooses to consume a good in the current time period and borrow from the future with the cost of borrowing.
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Savings (thousand)
Consumption (thousands)
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Consumption
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Adjust the interactive graph in order to observe the
relationship between income, consumption, and saving
changes as income increases. Use the graph to help you
answer the following questions.
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Savings
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Income (thousands)
a. At an income of 4000, how much is consumed?
How much is saved?
Consumption = $
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Savings = $3500
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Consumption = $
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Savings = $-500
O Consumption =
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Savings = $0
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