Macroeconomics Answers

1.     Assume a market has the following demand and supply functions:

Q_D = 28-3P

Q_S = 2P-12

Where P is the price

a)     Determine algebraically the equilibrium price and quantity.

b)     Plot the demand and supply curves and confirm your answer.

c)     Suppose supply shifts to Q_s =2P – 2 with no change no change in demand. Determine the new equilibrium price and quantity.

d)    Although the supply curve shifts to the right by 10, the quantity exchanged does not rise by 10, explain why the increase in quantity is smaller.

Suppose a consumers preferences can be represented by the utility function U (x,y)=min(2x,y).also suppose the consumer has 300 dollar to spend and the price of good x is px =3 dollar and the price of good y is py =1 dollar.if the consumer maximize their utility subject to their budget constraint,how much of good x and how much of good y will the consumer purchase?

Suppose a consumers preferences can be represented by the utility function U(x,y)=X2Y .in the table below, identify 4 point s on the consumer s indifference curve where U=10000, find x,y

1. Let’s say you are deciding on whether to move closer to a job or not, which you currently spend an hour driving to get to (takes two hours to cover both ways). Your current rent is $1300 and you will pay similar utility bills in both places. If your new place of residence cuts your driving by an hour (both ways), up to how much you will consider paying for rent a month if you value your idle hour spent driving at $20, and we only have 20 working days in a month and only consider time saved up as your only cost. What is the maximum amount of monthly rent you would be willing to pay at your new place?

Describe Keyne's theory of aggregate demand as it relates to wage levels and employment. Did Keynes believe that unemployment is caused by sticky wage.

The Namibian economy is closely linked to South Africa with the Namibian dollar pegged to the South African rand. Discuss the monetary arrangement & the peg and how it works. Please refer to the Common Monetary Area