EBK MACROECONOMICS (FOURTH EDITION)
4th Edition
ISBN: 9780393616125
Author: Jones
Publisher: YUZU
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Question
Chapter 2, Problem 3E
(a)
To determine
The increase in
(b)
To determine
The increase in GDP if the agent earns a commission of $6,000.
(c)
To determine
What happens to GDP during recession.
(d)
To determine
What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.
(e)
To determine
What happen to GDP if new European airlines purchase $50 million from the Americcan company.
(f)
To determine
What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.
Expert Solution & Answer
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not use ai please
For the two questions, use the provided Lorenz curve.
Income
100%
Lorenz curve
If the economy's income were distributed according
to the Equality line, what would the Gini coefficient
be?
1
0
0.5
Infinity
80
60
60
60
10
40
If the economy's income were distributed according
to the A line, how much of the economy's income is
earned by the third quintile of families?
60%
40%
20%
100%
20
Equality
0
20%
40
40
A
50
60
80
100
Families
1. For the following utility functions, (i) calculate the MRS, (ii) show whether the MRS is constant, or
diminishing, or increasing, (iii) calculate the degree of homogeneity, (iv) check the convexity of the
Indifference Curve using the condition that for a function to be strict quasi-concave, it must be that
f2f11-2f1f2f12+ ff22 < 0, (v) based on MRS's characteristics, draw an approximate Indifference
Curve, and (vi) comment on the type of utility function.
(a) U(x, y) = 3x + y
(b) U(x, y)=√√x y
(c) U(x, y)=√√x + y
(d) U(x, y)=xy
x+y
Chapter 2 Solutions
EBK MACROECONOMICS (FOURTH EDITION)
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