Calculate the transitory income or average propensity

Assignment Help Macroeconomics

Reference no: EM13196375

Assume that the average income of an artist is $40,000 per year and that C=0.75Y^P. Further assume that in a good year the artist earns $50,000 and that in a bad year she earns $30,000.

1)Calculate the artist's average propensity to consume on average, in a good year and in a bad year respectively.

2)Calculate the artist's transitory income in an average year, in a good year and in a bad year respectively

Reference no: EM13196375

Questions Cloud

Defendant commonly makes statements about the crime : When a plea agreement is made, the defendant commonly makes statements about the crime that they would not otherwise admit to voluntarily. If they rescend on this admission can the prosecution use this statement in a court of law?

Current health care system : Explain why patient access is a problem in our current health care system

Deploying new technology globally : There could be significant challenges and hurdles when deploying new technology globally. This can take the form of both political and regulatory dimensions. These types of obstacles can vary significantly, especially when introducing technology in d..

Arguments for and against saving mangroves : Many poor tropical countries point out that a hectare of shrimp ponds can provide 1,000 times as much annual income as the same area in an intact mangrove forest. Debate this point with a friend or classmate. What are the arguments for and against sa..

Calculate the transitory income or average propensity : Further assume that in a good year the artist earns $50,000 and that in a bad year she earns $30,000. calculate the artist's average propensity to consume on average.

Conceptually different from the maslow''s needs hierarchy : Four drive theory is conceptually different from the Maslow's needs hierarchy (as well as ERG theory) in several ways. Describe these differences.

Predicting the frequencies of the versions of this trait : Mrs. And Mr. Smith both have widow's peaks(dominant). Their first child also has a widow's peak, but their second child doesn't. Mr. Smith accuses Mrs.Smith of being unfaithful to him.

Role of women in foraging and horticultural based societies : The role of women in foraging and horticultural based societies

When speaking with your patient : When speaking with your patient, you should:

User Account

All Pages