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Mary has two sources of income, let her non - labor income be represented by V dollars per year. He r labor income comes from working h hours per year in the labor market at wage rate of w per hour. Assume that her utility is a function of composite good, C (measured in dollars and priced at $1) and hours of leisure consumed, L (priced at w per hour). As sume her wage rate per hour is $10, her time endowment is up to 2000 hours per year and her non - labor income V is $3000. Below is her specific Utility Function. U = 100*Ln(C) + 125* Ln (L) A. Determine her specific budget constraint equation. Also graphic ally illustrate her budget constraint with C on the y - axis and hours of leisure consumed, L, on the x - axis. Clearly label everything including the intercepts, x - and y - axis and the slope of the budget line. B. Now solve for the optimal consumption bundle for Mary and identify the optimal values for C (C*) and L (L*). C. At the optimum, determine her level of utility. D. Now assume, the government decides that Mary qualifies for a cash grant welfare program where s he would be entitled to $3000 per year. What would this cash grant do to her non - labor income V? How would V and w change? Illustrate the impact of the cash grant on Mary’s choice of optimal bundle graphically. At her new optimum, what would happen to her hours of leisure consumed?
Imagine you come back to your economics class in the year 2050. How will the textbook describe money and banking? Based on trends you see today, make a prediction for the future of money. Explain why you think this trend will occur and how it will af..
q.suppose you work in a financial institution how you would advise your clients with regard to the followinga a u.s.
We know that investment spending depends on real interest rates, yet the demand for money is dependant on nominal, not real, interest rates. Why should money demand be dependant on nominal rates?
Using the principles of covered interest parity, Explicates how a local industry can utilize a LC loan to synthetically create a 1-yr USD loan.
Suppose that the natural rate of unemployment in a particular year is 4 percent and the actual rate of unemployment is 11 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in ..
Construct a model to conclude your allocation of study hours. Include as assumptions points you "gain" from an hour of study time in each subject and your desired outcome on each test.
Suppose ABC Company is considering bidding on a given contract. It will cost $2,000 to prepare the bid. If the bid is lost, the $2,000 cost is also lost. If ABC Company wins the bid, it will make $40,000 and recover the $2,000 bid preparation cost..
Name three industries where the perfectly competitive model would be the most beneficial in analyzing behavior. Be sure to support your choices.
q1. a plant has a capacity of 4100 hydraulic pumps per month. the fixed cost is 504000 per month. the variable cost is
(Karloff) Consider the following market for used cars. There are many sellers of used cars. Each seller has exactly one used car to sell and is characterized by the quality of the used car he wishes to sell. Let θ ∈ [0, 1] index the quality of a used..
Depict this data with a Pareto chart. Also depict cumulative complaint line. What percent of total complaints can be attributed to most prevalent complaint.
A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $800,000 per month. For this situation, determine the optimal monthly sales volume for this product..
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