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Question
Suppose a household has the following lifetime utility function U = C 1-σ t - 1 1 - σ + β C 1-σ t+1 - 1 1 - σ , 0 < β < 1. The parameter σ controls how much the consumer likes to smooth. Its inverse, 1/σ is called the intertemporal elasticity of substitution (low σ means low desire for smoothing and a high willingness to substitute intertemporally). The household faces two within-period budget constraints of the form Ct + St = Yt Ct+1 = Yt+1 + (1 + rt) St . Let's assume that the household's income in the current period is Yt = 350 and income in the future period is Yt+1 = 400. The real interest rate rt is 0.05, or 5%, per period. The discount rate is β = 1 1.1 . (a) What are the choice/endogenous variables.
Factor mobility means the ease with which a factor can be moved from one form or area of employment to another. There are two aspects to mobility. Movement from one employment to another is called occupational mobility and movement from one plac..
lean's deluxe garment bag sales increased from, 4,800 units to 6,000 units in response to price drop from $30/unit to $20/unit. Calculate arc price elasticity of this product using mid-point formula.
Explain how a monopolist can increase profits by price discriminating. What are the conditions necessary for price discrimination?
In markets with monopolistic competition, you often find companies using creative ways to compete with each other and attract customers.
If the American auto companies make a breakthroufh in automobile technology and are able to produce a car that gets 70 miles to the gallon, what will happen to the value of the dollar? Use the demand-supply model of the dollar to explain.
When U= alnx+blny. Solve for the indirect utility function. Solve for the expenditure function (either by inverting the indirect utility function or minimizing expenditure using the Lagrangian method).
The Quality Director must identify the changes needed to improve customer satisfaction and loyalty but also maintain financial stability.
Briefly explain why firms that pursue cost leadership or diffentiation achieve returns that are about equivalent, have higher returns, and firms that are stuck in the middle have the lowest returns?
Suppose that currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, traveler’s checks are $0, excess reserves are $15 billion, and the required reserve ratio is .15. a. Calculate the M1 money supply, the currency-d..
If the buyer can tell good or ordinary or bad, will the good cars sell? Will the ordinary cars sell? Will the bad cars sell?
What are the characteristics of a purely competitive market? What makes these important? List at least two industries that are characterized by perfect
explain why we would want the exact solution to a real-world or mathematical problem. explain why we would want an approximate solution to a real-world
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