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C= 500 + 0,8Y, tax rate(t)= 0,25, G=1000 ve I= 1200. X= 500, M= 500 + 0,1Y.
Calculate the budget balance at equilibrium level of Y.
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- Figure 2: Real Personal Consumption Expenditure (annualized growth): 2016-2020 50 25 25 5.0 35 100 -125 03 2005 01 2016 03 2016 01 2017 Q3 2017 03 2018 01 2029 03 2009 01 2020 1. Determine the effect of the subsidy on the consumer's budget constraint 2. Graph the original and the new budget constraints 3. Find the new optimization point and determine the effects of the subsidy m on C, l and N*. Identify the substitution and income effects. 4. Graph the substitution and income effectsTask 5: Consumption as young and consumption as old Now suppose Mary is thinking about her retirement and wants to understand how much to save. Today she can either con- sume or save for retirement. During her young, working life she will make 100.000 euros. Thus, her current budget constraint is Cy + S = 100.000. In her retirement she has no income, only the amount she saved as young. She can save at a rate of (1+r). So, her budget constraint as old is Co = (1+r)S. (a) Write Mary's lifetime budget constraint as plot it in a graph. Tip: Solve for savings while old and substitute in the young budget constraint. (b) Mary's utility from consumption as young and consumption as old is U(Cy,Co) = 1-0 Solve Mary's maximization problem. What is the MRS and the MRT? (c) Suppose Mary wins the lottery while young. What is the effect on her optimal decision for consumption as young and as old? (d) The local bank decided to increase the interest rate on savings. Discuss the effect of this increase…4. "The increase in value would be created by having available one additional unit of a limiting resource at the original cost" is: A) Demand price B) Shadow price C) None of the above 5. The following statements have been made about rolling budgeting: 1) Keep updating the budgeting by adding further an accounting period when the earlier has expired. 2) The variants of the budget are not adjusted to reflect actual levels. Which of the above statements is/are true? A) Only 1 B) 1 and 2 C) None of the above
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- Dollars 200 0 f XMR g hj Output D MC 41) Refer to the diagram. Equilibrium price is A) c. B) d. C) b. D) e. ATCPQ 9.02 Tax revenue is likely to rise due to a higher tax rate if the elasticity of demand is and the elasticity of supply is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 0.8; 0.9 b 0.9; 1.1 1.1; 0.9 d 1.2; 1.4In the market for cars, the price elasticity of supply is +1.5, and the price elasticity ofdemand is -0.8. The equilibrium price is $ 30 thousand, and quantity is 120 million.(a) Assuming supply and demand are linear, reconstruct and draw the supply and demandcurves. Label the intercepts.(b) To reduce traffic, the government imposes a $400 tax on cars. What are PB and PS after thetax? What is the new equilibrium quantity? Illustrate them on the same graph.(c) How big is the change in consumer surplus, producer surplus, government revenue, anddeadweight loss?
- Keep in mind that management needs to recognize the demand for their product. While this is an obvious statement, it cannot be over emphasized. For example, the inverse demand for Tires is: P = .1I – 11QD The current market price is $21 and average income (I) is $10,990. Calculate the markets total Demand? Calculate the market’s consumer surplus. Draw the Demand Curve and identify the price quantity and label the axes for price and quantity. Calculate the price elasticity of demand at the equilibrium output. Is the Price elasticity of demand calculated in Question #1c elastic or inelastic? Based on the income elasticity of demand, is this product a normal good or an inferior good?1.In income substitution effects acts in opposite direction, then the total effect on consumption is always negative. (T/F)2) Daniel has the following Jineas Preferences over black tea be) and milk (y) (a) Setup the expenolituse minmization Problem for Daniel. what conditions, (BC) or(NNC) will necessarily be (b) Solve the expenditure Problem and obtain the Compensated and the Cost minimization function when binding at the oPtimum? ū = 40 and P = $6. c) Other Pic attach for Part(c)
