How to ensure smooth consumption.

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Answer 1

Question

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.

Economics Concept Introduction

Concept introduction:

Consumption: Consumption is defined as the act of utilising the total or partly income to meet the needs in a given period of time.

Savings: Savings is defined as the part of income that is not consumed in the current period.

Consumption smoothing: Consumption smoothing is the economic concept which refers to the desire of people to have a stable consumption pattern.

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Fems A and B are duopolist producers of widgets. The cost function for producing widgets C(Q)-Q² The market demand function for widgets i Q-192P Qmeasures thousands of widgets per year, Competition in the widget market is described by the Coumot model Instructions: Round your answers to 2 decimal places a What are the firms' Nanh equbrium output? b. What is the resulting price? c. What do they each emp How does the price compare to marginal cost? Price is ck to marginal cost How do the price and the two fems' joint profit compare to the monopoly price and prof Compared to the monopoly price, the Cournot price is to sed. Compared to the monopoly profit, the joint profit of the two fems to select

Suppose the marginal social cost of television sets is $100. This is constant and equal to the average cost of television sets. The annual demand for television sets is given by the following equation: Q = 200,000-500P, where Qis the quantity sold per year and P is the price of television sets. a) If television sets are sold in a perfectly competitive market, calculate the annual number sold. Under what circumstances will the market equilibrium be efficient? b) Show the losses in well-being each year that would result from a law limiting sales of television sets to 100,000 per year. Show the effect on the price, marginal social benefit, and marginal social cost of television sets. Show the net loss in well-being that will result from a complete ban on the sales of television sets. (show with graphs.)

refer to exhibit 8.12 and identify each curve in the graph

Answer 2

Question

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.

Economics Concept Introduction

Concept introduction:

Consumption: Consumption is defined as the act of utilising the total or partly income to meet the needs in a given period of time.

Savings: Savings is defined as the part of income that is not consumed in the current period.

Consumption smoothing: Consumption smoothing is the economic concept which refers to the desire of people to have a stable consumption pattern.

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Answer 3

Question

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.

Economics Concept Introduction

Concept introduction:

Consumption: Consumption is defined as the act of utilising the total or partly income to meet the needs in a given period of time.

Savings: Savings is defined as the part of income that is not consumed in the current period.

Consumption smoothing: Consumption smoothing is the economic concept which refers to the desire of people to have a stable consumption pattern.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.

Economics Concept Introduction

Concept introduction:

Consumption: Consumption is defined as the act of utilising the total or partly income to meet the needs in a given period of time.

Savings: Savings is defined as the part of income that is not consumed in the current period.

Consumption smoothing: Consumption smoothing is the economic concept which refers to the desire of people to have a stable consumption pattern.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.

Economics Concept Introduction

Concept introduction:

Consumption: Consumption is defined as the act of utilising the total or partly income to meet the needs in a given period of time.

Savings: Savings is defined as the part of income that is not consumed in the current period.

Consumption smoothing: Consumption smoothing is the economic concept which refers to the desire of people to have a stable consumption pattern.

Answer 6

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.

Economics Concept Introduction

Concept introduction:

Consumption: Consumption is defined as the act of utilising the total or partly income to meet the needs in a given period of time.

Savings: Savings is defined as the part of income that is not consumed in the current period.

Consumption smoothing: Consumption smoothing is the economic concept which refers to the desire of people to have a stable consumption pattern.

Answer 7

Chapter 29, Problem 1FT

To determine

How to ensure smooth consumption.

Answer 8

Expert Solution & Answer

Explanation of Solution

If people want to smooth their consumption over time, they tend to reduce the current consumption and save more. According to the consumption – smoothing theory, people who have fluctuations in income, save most of their income in the good years and use it during the bad times in order to maintain a smooth consumption pattern. When people receive an unexpected winning as a lottery, they tend to postpone their consumption from periods of high income to low income to obtain more stability and predictability. They may also spend money for consuming durable goods like houses or cars which represent spending over time.