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C = 50 + 0.80 (Y – T)
I = 200
G = 100
Find out the equilibrium level of income.
Suppose G increases to 125 what is the new equilibrium level of income?
What level of G is needed to achieve a target income of 200?
I = 200
G = 100
Find out the equilibrium level of income.
Suppose G increases to 125 what is the new equilibrium level of income?
What level of G is needed to achieve a target income of 200?
Consider the financial crisis 2007-2009 in USA.
1. Explain the origin of this crisis. Provide a summary of this crisis, consisting of the reasons
of this crisis, and the breadth and extent of the crisis. Identify countries and markets
involved in the crisis
Now, assume that the crisis has been continuing for 10 years. We call this period as a long
run period.
2. Explain the effect of this crisis on USA’s GDP in long-run?
1. Explain the origin of this crisis. Provide a summary of this crisis, consisting of the reasons
of this crisis, and the breadth and extent of the crisis. Identify countries and markets
involved in the crisis
Now, assume that the crisis has been continuing for 10 years. We call this period as a long
run period.
2. Explain the effect of this crisis on USA’s GDP in long-run?
Question 4
Suppose you have the following information about a closed economy:
C = 50 + 0.80 (Y – T)
I = 200
G = 100
a) Find out the equilibrium level of income.
b) Suppose G increases to 125 what is the new equilibrium level of income?
c) What level of G is needed to achieve a target income of 200?
Economics
4. Suppose a particular consumer has 8 birr to be spent on two goods, A and B. The unit price of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from the consumption of the goods is given below.
Quantity MUA MUB
1 36 30
2 24 22
3 20 16
4 18 12
5 16 10
6 10 4
a. Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer?
b. What is the total utility at the utility maximization level?
Quantity MUA MUB
1 36 30
2 24 22
3 20 16
4 18 12
5 16 10
6 10 4
a. Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer?
b. What is the total utility at the utility maximization level?
What is macroeconomics
Suppose that a technological advance occurs that affects the production of capital goods but not consumption goods. Show the effect on the production possibility frontier
We got demand function q=6000-30p (q quantity, p=price). The total cost function is C(q)=72000+60q a) Solve the demand function for p and define its domain b) Find the marginal cost funtion MC and explain the result c) Find the income function R(q)
We got demand function q=6000-30p (q quantity, p=price). The total cost function is C(q)=72000+60q a) Solve the demand function for p and define its domain b) Find the marginal cost funtion MC and explain the result c) Find the income function R(q)
Suppose the production function is given by Q (L,k)=L 3\2 k1\2 assuming capital fixed find APL and MPL
Economics
Derive an equation to calculate the income elasticity of demand at any point on the following function: Q = 40 - Y-3/2
