EBK PRINCIPLES OF ECONOMICS
7th Edition
ISBN: 8220102958395
Author: Mankiw
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 34, Problem 7PA
Subpart (a):
To determine
Marginal propensity to consume.
Subpart (b):
To determine
Marginal propensity to consume.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
1b. (5 pts) Under the 1990 Farm Bill and given the initial situation of a target price and
marketing loan, indicate where the market price (MP), quantity supplied (QS) and demanded
(QD), government stocks (GS), and Deficiency Payments (DP) and Marketing Loan Gains
(MLG), if any, would be on the graph below. If applicable, indicate the price floor (PF) on the
graph.
TP
$
NLR
So
Do
Q/yr
Now, let us assume that Brie has altruistic preferences. Her utility function is now given by:
1
UB (xA, YA, TB,YB) = (1/2) (2x+2y) + (2x+2y)
What would her utility be at the endowment now? (Round off your answer to the nearest
whole number.)
110
Problema 4 (20 puntos):
Supongamos que tenemos un ingreso de $120 y enfrentamos
los precios P₁ =6 y P₂ =4. Nuestra función de utilidad es:
U(x1, x2) = x0.4x0.6
a) Planteen el problema de optimización y obtengan las
condiciones de primer orden.
b) Encuentren el consumo óptimo de x1 y x2.
c) ¿Cómo cambiará nuestra elección óptima si el ingreso
aumenta a $180?
Knowledge Booster
Similar questions
- • Prismatic Cards: A prismatic card will be a card that counts as having every suit. We will denote, e.g., a prismatic Queen card by Q*. With this notation, 2.3045 Q would be a double flush since every card is a diamond and a heart. • Wild Cards: A wild card counts as having every suit and every denomination. Denote wild cards with a W; if there are multiple, we will denote them W₁, W2, etc. With this notation, W2 20.30054 would be both a three-of-a-kind (three 2's) and a flush (5 diamonds). If we add multiple wild cards to the deck, they count as distinct cards, so that (e.g.) the following two hands count as "different hands" when counting: W15 5Q and W255◊♡♡♣♣ In addition, 1. Let's start with the unmodified double-suited deck. (a) Call a hand a flush house if it is a flush and a full house, i.e. if all cards share a suit and there are 3 cards of one denomination and two of another. For example, 550. house. How many different flush house hands are there? 2. Suppose we add one wild…arrow_forwardnot use ai pleasearrow_forwardIn a classic oil-drilling example, you are trying to decide whether to drill for oil on a field that might or might not contain any oil. Before making this decision, you have the option of hiring a geologist to perform some seismic tests and then predict whether there is any oil or not. You assess that if there is actually oil, the geologist will predict there is oil with probability 0.85 . You also assess that if there is no oil, the geologist will predict there is no oil with probability 0.90. Please answer the two questions below, as I am trying to ensure that I am correct. 1. Why will these two probabilities not appear on the decision tree? 2. Which probabilities will be on the decision tree?arrow_forward
- In this question, you will test relative purchasing parity (PPP) using the data. Use yearly data from FRED website from 1971 to 2020: (i) The Canadian Dollars to U.S. Dollar Spot Exchange Rate (ER) (ii) Consumer price index for Canada (CAN_CPI), and (iii) Consumer price index for the US (US_CPI). Inflation is measured by the consumer price index (CPI). The relative PPP equation is: AE CAN$/US$ ECAN$/US$ = π CAN - πUS Submit the Excel sheet that you worked on. 1. First, compute the percentage change in the exchange rate (left-hand side of the equation). Caculate the variable for each year from 1972 to 2020 in Column E (named Change_ER) of the Excel sheet. For example, for 1972, compute E3: (B3-B2)/B2). ER1972 ER1971 ER 1971 (in Excel, the formula in cellarrow_forwardnot use ai pleasearrow_forward8. The current price of 3M stock is $87 per share. The previous dividend paid was $5.96, and the next dividend is $6.25, assuming a growth rate of 4.86% per year. What is the forward (next 12 months) dividend yield? Show at least two decimal places, as in x.xx% %arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Macroeconomics: Principles and Policy (MindTap Co...EconomicsISBN:9781305280601Author:William J. Baumol, Alan S. BlinderPublisher:Cengage Learning
Macroeconomics: Principles and Policy (MindTap Co...
Economics
ISBN:9781305280601
Author:William J. Baumol, Alan S. Blinder
Publisher:Cengage Learning