Reference no: EM13854677
Consider education (e) and health (h). Education depends on school inputs (like good teaching and school supplies), denoted s, and on health. School inputs and health are perfect substitutes in the production of education:
e = s +0.4 h.
Health depends on medical inputs (m) and education. If you are more educated, you will know more about taking care of yourself and will be able to deal with doctors and insurance companies better. Again, medical inputs and education are perfect substitutes in the production of health:
h = m+ 0.4 e.
a. Find the equilibrium levels of health and education as functions of school inputs (s) and medical inputs (m).
b. Suppose school inputs improve by one unit. What is the immediate impact on education (before health can adjust)? What is the equilibrium impact on education (allowing for adjustment of health)? What is the equilibrium impact on health?
c. Both school inputs and medical inputs are subject to independent shocks that are also independent over time. In any period, medical inputs equal 2 with probability ½ and 0 with probability ½. The same is true for school inputs. Periods are long enough that within each period equilibrium is attained. For each of the four (equally probable) combinations of school and medical inputs ((2,2), (2,0), (0,2), and (0,0)) find and graph the equilibrium levels of health and education (the axes should be health and education).
d. On your graph, think about what the regression line would look like if you were to regress health on education (I’m not asking you to run a regression). If you want to draw it by eyeball, do so. Does it slope up or down or is it flat?
e. Over time, is education positively correlated with health? Why or why not?
|
An autocratic management style is ideally suited for
: An autocratic management style is ideally suited for
|
|
Calculate the expected utility of the investment opportunity
: Suppose an economic agent has a utility function U = Ln (R). Assume R is the return on investment and utility is the natural log of investment. If the investment is highly successful then the agent earns $10000. Derive the expected value of the inves..
|
|
The national labor relations board has sought a court
: The National Labor Relations Board has sought a court order that would have required Boeing to maintain its second 787 assembly line in the Pacific Northwest, not at the plant being built in North Charleston.
|
|
What is the equilibrium impact on education
: Graph these functions and find the non-zero equilibrium. Prove that the equilibrium at (0,0) is not stable. Suppose that school inputs improve by one unit, from 10 to 11. What is the immediate impact on education (before health can adjust)? What is t..
|
|
Find the equilibrium levels of health and education
: Consider education (e) and health (h). Education depends on school inputs (like good teaching and school supplies), denoted s, and on health. School inputs and health are perfect substitutes in the production of education: Find the equilibrium levels..
|
|
What deductions would be available to dorian under
: What deductions (if any) would be available to Dorian under s 8-1? Would the interest on a loan to acquire the property be an allowable deduction?
|
|
Least trade-restrictive measures
: Critically evaluate the provision resulting from the Uruguay Round to require that the least trade-restrictive measures should be used to achieve environmental goals. Include in your answer both the environmental and economic implications. Support or..
|
|
The case for taking zynga private
: This spring, Mark Pincus returned to Zynga, the gaming company he founded in 2007, to attempt the near-impossible: a turnaround of a consumer tech company. Pincus, you might remember, was ousted in 2013 after the company's share price cratered fro..
|
|
We have identified five estimating methods
: We have identified five estimating methods: the Analogy Method, the Bottom-up Method, the Top-down Method, the Expert judgment Method, and the Parametric or Algorithmic Method.
|