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Flossy has a quasi-linear utility function, 16q1^0.5 + q2. The price of good 1 is fixed at one. Thus, Flossy's budget constraint is q1 + p2q2 =Y, where Y denotes income. 6.1 Compute the interior solution. 6.2 Compute the interior solution where q1 > 0 and q2 = 0. 6.3 Under what conditions on prices and income is the corner solution obtained?
Let kids denote the number of children ever born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is kids =
The circular flow of income in a closed economy A closed economy exists when there is no international trade. We shall also assume that in this particular closed economy there
This paper empirically analyses the effect of oil price shocks on key macroeconomic indicators in the United Kingdom.The aim of the paper is to establish a relationship between oil
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Derivation of Indifference Curve: Consider any commodity bundle denoted by point A in the above figure which consist x 0 1 and x 0 2 amount of good I and good II respectiv
This release also states that the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. Additio
Using the Mundell-Fleming model, describe how an increase in a country’s risk premium on the world interest rate can result in a higher level of real income. Under what circumstanc
A recent study in NJ showed that 50% of all patients will return to the same dentist. Suppose nine patients are selected at random, what is the probability that: (a) exactly five o
how can the central bank influence the size of the multiplier
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