Reference no: EM132133659
Question: Consider an economy described by the following:
• autonomous consumption=C (bar) = 2.25 trillion
• autonomous investments=I (bar) = 1.3 trillion
• government purchases=G = 3.6 trillion
• taxes=T = 3 trillion
• additional cost of borrowing due to financial frictions=f = 1
• marginal propensity to consume=mpc = 0.75
• sensitivity of investments to the cost of borrowing=d = 0.3
• Monetary policy curve: r = 1 + p (that is: r(bar) = 1 and ? = 1).
(a) Derive the expression for the AD curve. What is its vertical intercept? What is its slope? To answer the following parts, assume inflation is p = 1.
(b) What is the level of output (Y )?
(c) What is the real interest rate (r)?
(d) What is the level of consumption (C)?
(e) What is the level of investments (I)?
What is the efficient amount of air quality
: Consider an air basin with only two consumer, Huck and Matilda. Suppose Huck's demand for air quality is given by q_h=1-p where p is Huck's marginal.
|
Using decision trees analysis and EMV
: Regardless of whether they make or buy the part, JDI will need 150,000 of these parts. Using decision trees analysis and EMV, what should JDI do?
|
Find a nash equilibrium from the table
: Consider a bottled water market in which only two firms are operating: Canyon Water and Lake Water. Assume zero cost to produce bottled water.
|
What changes in culture are needed at the plaza inn
: What structural change is indicated at the Plaza Inn? What changes in culture are needed at the Plaza Inn?
|
What is the level of consumption
: Derive the expression for the AD curve. What is its vertical intercept? What is its slope? To answer the following parts, assume inflation is p = 1.
|
Write down the social planner maximization problem
: Write down the social planner's maximization problem and the social planner's optimality condition. Derive the Pareto optimal allocation for consumption.
|
Calculate the marginal cost for each entry of the quantity
: Calculate the marginal cost for each entry of the quantity in the above table, and using the marginal cost you computed, find the quantity of output.
|
Is the product standardized
: Consider the following products. Decide whether each one meets the conditions of perfect competition-state that it does or does not. Try, as much as possible.
|
Find the marginal rate of transformation
: Consider the following utility function and corresponding marginal rate of substitution for consumption, C and leisure, and L: U = and MRS.
|