Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Ryan has income of $1000 today and $500 tomorrow. Ryan can lend and borrow at an interest rate of 10%. There is 5% ináation. His preferences for intertemporal consumption are represented by the following utility function u(c1; c2) = c1c2.
(a) Write down the equation for his intertemporal budget constraint (c1 is his consumption today and c2 is his consumption tomorrow), graph it and label his endowment and the intercepts on each axis.
(b) What is his optimal consumption bundle?
(c) If interest rates increase to 20%, write down his new intertemporal budget constraint and graphically demonstrate the change to his intertemporal budget constraint and label any changes to the intercepts.
(d) How does this change effect his welfare? Explain.
The University Hall has undergone an extensive remodel that resulted in better premises to purchase and consume food. Students appreciate the remodel and are more likely to spend time at the Hall than before. Food prices after the remodel have increa..
Suppose you are buying a car. You go to one dealer who works a deal in which you would pay $3,740 each year for three (3) for the car. Another deal gives you a deal in which you would pay $2,870 each year for the four (4) years. Which is the better d..
Using supply and demand and competitive analyses, explain what happens to a pharmaceutical company’s revenues and profits from an individual drug once it loses its patent protection. Then identify at least one strategy the company can use to mitigate..
Which of the following is explained by the price elasticity of demand for a product?
illustrate and explain how each of following would affect market value of US dollar. Canada experiences severe deflation. US engages in an expansionary monetary policy.
The public cash withdrawals from banks decrease the central bank liabilities and shrink the size of the banking system balance sheet. Do you agree or not? Explain your answer. Use the Fed and the banking balance sheet to support your answer.
Suppose that consumption spending accounts for about 60 percent of GDP on average, while investement and government purchases each account for 20 percent of GDP on average. (Assume that this country has no foreign trade, so exports and imports are ze..
A consumer has preferences represented by the utility function U(x1, x2) = ln x1 + x2 . Denote prices and income by p1, p2 and I respectively. Write the utility maximization problem and get the first order conditions. Solve the system of equations an..
All else equal, consumers prefer market outcomes with: How large is deadweight loss in equilibrium?
One hundred dollar of interest is paid each month on an investment of $10,000. If interest is compound monthly, what is the accumulation at the end of two years?
Your disposable income is $100,000 a year. You face a 50/50 chance of losing $10,000 from an illness requiring surgery and value your income to the utility function U=income^0.6. What is your expected income, what is your certainty equivalent, what i..
Explain how the circular flow diagram relates to the current economic situation. Using the circular flow diagram, explain a way that your family interacts in the factor market and a way that it interacts in the products market.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd