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Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
16th Edition
ISBN: 9781305648210
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel; David A. Macpherson
Publisher: Cengage Archive
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Question
Chapter 4, Problem 9CQ
To determine
Incidence of tax.
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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 4 Solutions
Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
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- A 9R, where 1-b 1-b Question Two Consider the IS-LM Model. Let the IS equation be Y = (1b) is the marginal propensity to save, g is the investment sensitivity to interest rates, and A is an aggregate of exogenous variables. Let the LM equation be Y = +=R, where k and 1 are income and interest sensitivity of money demand, and Mo is real money balances. Mo k k It is given b = 0.7, g = 100, A = 252, k = 0.25, l = 200, and Mo 176. a) Utilize the given numbers to substitute the variables in the model, and then write down the IS-LM equation system in matrices form. b) Solve for the equilibrium values of Y and R using Cramer's Rule. (Note: Keep 2 digits after the decimal point.)arrow_forwardSuppose that a family's income is exactly the same as the poverty threshold. This family's income deficit would be and their ratio of income to poverty would be 130 0; 1 ○ 1 %3 030 Consider a family of four in 2008, whose poverty threshold is $22,024. If this family's total income was $16544, what would their income deficit be? Income deficit: $arrow_forward3. Based on the 'Compensation Wage Differentials,' (CWD) answers the next questions: In an economy where workers only have two options in their daily lives: work in firm 1 and be at home. The next equation gives the labour supply for the firm 1, Ls¹(w) = -40 + w. a) How much is it willing to pay worker number 10 to stay at home? b) If a new firm (firm 2) is hiring in this market, and its supply of labour is Ls²(w) = -80+ w. Which firm (1 or 2) is considered an ‘uncomfortable' workplace? c) What is the CWD for the firm considered an ‘uncomfortable' workplace when it wants to hire employee number 10? d) Two industries require workers with the same characteristics (skills and experience). Industry B is recognized as having much more hazardous working conditions than Industry A. What is the CWD between the two industries? Industry A Industry B Demand Supply 5 10 15 20 25 5 10 15 20 Labor (Hours) Labor (Hours) Demand Supplyarrow_forward
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