Suppose that c= a+by, where c= consumption, a = consumption at zero income, b = the slope of the consumption from function, and y = income, a) are c and y positively related or are they negatively related? b) If graphed, would the curve of this equation slope upward or downward? c) What is the value of c if a = 10, b = 50 and y = 200? d) what is the value of y if c = 100, a = 10 and b = 25? %3D %3D %3D
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- Tim is buying pizza and salad for a company lunch. Suppose that a slice of pizza costs $4.00, and a bowl of salad costs $5.00. Let ♬ be the amount in dollars that Tim spends on pizza and salad. If Tim buys P slices of pizza and S bowls of salad, then the total amount of money he spends (B) can be represented by the equation Now rearrange the equation you wrote above so that S is written in terms of E and P. The quantity of salad he buys can be represented by the equation Suppose Tim has $40.00 to spend on pizza and salad; that is, E = $40.00. Complete the following table with the values of P or S that make the equation true. Hint: To complete the first row, determine the number of salad bowls Tim can purchase with $40.00, when the number of pizza slices he purchases is 0. Budget Pizza (Dollars) (Slices) 40.00 0 40.00 5 40.00 Use the black line (plus symbols) to plot the line illustrating the combinations of pizza and salad that Tim can purchase with a budget of $40.00. SALAD (Bowis) 14…The function Q = F(p,ps,y) describes how the monthly demand, Q (measured in 100s of Widgets), for Grinch Inc. Widgets depends on the variables: • p = the price/Widget that Grinch Inc. sets (measured in $). • Ps= average price of substitutes for Grinch Inc. Widgets (measured in $). • y = average disposable income in the market for Widgets (measured in $1000s). When average disposable income in the market is $4200 and Grinch Inc.s price is $12 and the average price of substitutes is $11... ● Q = 66 •Op=-0.28 2ps = 0.52 ● Qy = 0.31 If average monthly income increases to $4400 and the average price of substitutes increases to $11.35, by approximately how much can Grinch Inc. increase their price while keeping demand for their Widgets fixed at Q = 66 ? Ο Δp = 0.87 O There is no way to estimate this from the given information.. Ο Δρ = 0.53 O Ap = 0.72Assuming a chocolate bar costs $4 each and a bottle of wine $25. a) Graphically depict (and provide an appropriate title) the behavior of the following three individuals according to a model we have studied and then given information: Alex with an income $1000, Sandra with an income of $750, and Bo with an income of $1200. b) Can you indicate the level of actual consumption given the information in the problem? If yes, why? If no, why not?
- Remember to illustrate diagramatically for some of these parts! 6. Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not work, you have no income. You have no ability to borrow or lend, so your consumption, c, is simply equal to your income. a) Derive and plot the feasible set, between daily values of consumption c, and “leisure”, l. Label the values at the intercepts (the points where the feasible frontier cuts the two axes). b) Assume that your optimal choice of consumption and leisure is to work 8 hours per day. Illustrate this choice diagrammatically using the feasible set and indifference curves. c) Use indifference curves and the feasible set to show why, given the properties of the optimal choice in part b), it is not optimal to work, say, 10, or 6 hours per day. d) Now assume that you receive an income of £140 per week from an unknown benefactor. Show the impact on your feasible set, and show a new optimal choice in which consumption increases…Rajiv is buying pizza and salad for a company lunch. Suppose that a slice of pizza costs $2.00, and a bowl of salad costs $4.00. Let E be the amount in dollars that Rajiv spends on pizza and salad. If Rajiv buys P slices of pizza and S bowls of salad, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that S is written in terms of E and P. The quantity of salad he buys can be represented by the equation Suppose Rajiv has $32.00 to spend on pizza and salad; that is, E = $32.00. Complete the following table with the values of P or S that make the equation true. Hint: To complete the first row, determine the number of salad bowls Rajiv can purchase with $32.00, when the number of pizza slices he purchases is 0. Budget Pizza Salad (Dollars) (Slices) (Bowls) 32.00 32.00 8 32.00 Use the black line (plus symbols) to plot the line illustrating the combinations of pizza and salad that Rajiv can purchase with a budget of…Kenji is buying pizza and salad for a company lunch. Suppose that a slice of pizza costs $2.00, and a bowl of salad costs $4.00. Let E be the amount in dollars that Kenji spends on pizza and salad. If Kenji buys P slices of pizza and S bowls of salad, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that S is written in terms of E and P. The quantity of salad he buys can be represented by the equation Suppose Kenji has $32.00 to spend on pizza and salad; that is, E= $32.00. Complete the following table with the values of P or S that make the equation true. Hint: To complete the first row, determine the number of salad bowls Kenji can purchase with $32.00, when the number of pizza slices he purchases is 0. Budget Pizza Salad (Dollars) (Slices) (Bowls) 32.00 0 32.00 8 32.00 00 0
- Assuming that each of the following functions are linear, give an economic interpretation of the slope of the function: a. F(q) is the revenue from producing q units of output b. G(x) is the cost of purchasing x units of some commodity c. H(p) is the amount of commodity demanded by households when its price is p d. C(Y) is the national consumption when national income is Y e. S(Y) is the total national savings when national income is Y2. Consider a consumer with preferences over current and future consumption given by U(C₁, C₂) = (C₁)¹/2 (c₂) ¹/2 where c₁ denotes the amount consumed in period 1 and c₂ the amount consumed in period 2. Suppose that period 1 income expressed in units of good 1 is m₁ = 20000 and period 2 income expressed in units of good 2 is m2 = 30000. Suppose also that p₁=p2 = 1 and let r denote the interest rate. (a) Find the optimal consumption bundle when r = 0.15. Is the consumer a saver or a borrower?Kenji is buying salad and pizza for a company lunch. Suppose that a bowl of salad costs $3.00, and a slice of pizza costs $4.00. Let E be the amount in dollars that Kenji spends on salad and pizza. If Kenji buys S bowls of salad and P slices of pizza, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that P is written in terms of E and S. The quantity of pizza he buys can be represented by the equation Suppose Kenji has $48.00 to spend on salad and pizza; that is, E= $48.00. Complete the following table with the values of S or P that make the equation true. Hint: To complete the first row, determine the number of pizza slices Kenji can purchase with $48.00, when the number of salad bowls he purchases is 0. Pizza Budget Salad (Dollars) (Bowls) (Slices) 48.00 0 48.00 48.00 8 0
- Suppose you consume three goods, and you have the following expenditure function: 0.5 E(Pa, Py, Pz, U)=p5 (Py + P₂) 0.5U Which of the following are true? (a) x and y are net complements (b) x and y are net substitutes (c) y and z are net complements (d) y and z are net substitutes (e) A and C (f) B and C (g) B and DQ83 Suppose Jillian spends $250 on books per year when her income is zero. As her income rises, she spends 8 percent of each additional dollar of income on books. The correct mathematical equation that describes the functional relation between her spending on books (B) and her income (Y) is... a. B = 250 + 8Y b. B = 250 + 0.02Y c. Y = 250 + 0.08B d. Y = 250 - 8Y e. B = 250 + 0.08Y Clear my choice6, Let D(p,q) and E(p, q) be the demands for two commodities when the prices per unit are p and q, respectively. Suppose the commodities are substitutes in consumption, such as butter and margarine. What are the normal signs of the partial derivatives of D and E with respect to p and q? Explain.