Macroeconomics Answers

At an income of 100,000 a consumer spent 90 000 on consumer goods.when income rose to 200,000 the consumer spent 160 000 on consumer goods what is the MPC

Where

C=300+0.2Y

I=550

G=800

X=400

M=100+0.4Y

T=0.1Y

Use the above information to answer the following questions

1) if C=300+0.2Yinterpret the meaning of the value 300

2)state the values of MPT,MPC and MPS on disposable income and MPM

3)calculate MPC and MPS on national income

4)find the level of national income in the economy

5) calculate net exports and interpret

6) if investment declines by 15% ,what will be the change in National income

“The number of firms in an industry is not always a good indicator of the extent to which that industry is competitive.” Do you agree with this statement? Critically examine.

Explain the utility-maximizing rule of a consumer.

89. Outline and explain two characteristics of indifference curves.

Discuss how the law of diminishing marginal utility occurs.

Cite a real-life example of how you rationally behave as a consumer. 

If the utility function involving commodities X and Y is U= 8x + 22y - x² - 2xy - y² and the budjet constraint is 12= x + 2y, determine the values of x and y that maximize the utility?

[10:15 am, 27/01/2022] Siyad: a) The average prices and quantities of six hypothetical items offered by a government agency running a social protection program for a marginalized community are shown in the following table:

2020

2021

Items

Price (Kshs/Kg)

Quantity (Kg,000)

Price (Kshs/Kg)

Quantity (Kg,000)

Maize Flour (A)

10

4

12

5

Vegetables (B)

15

6

18

10

Peas (C)

10

6

10

10

Beans (D)

20

10

22

20

Wheat (E)

30

12

40

18

Millet (F)

40

10

50

12

Tessy, the programs manager has hired you as a consultant to advice if she needs to ask the government for additional budgetary support. Using 2020 as base year, compute Kelly’s and Fisher’s Price index numbers for 2021 and in each case comment on the result

Suppose the government raises govt. expenditure by 20% in order to increase aggregate demand. Show how this policy results in the crowding out effect.