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True or False
1. Completeness is not a particularly strong requirement. It means that the function, U, is defined for every possible combination of the values b and c. so, for every bundle Z:(b, c), we are able to calculate U(b, c)
True
2. If the preference relation is monotonically decreasing and convex, then in a diagram, indifference curves are upward – sloping and concave and never cross. So that preferred sets are nested
1. Completeness is not a particularly strong requirement. It means that the function, U, is defined for every possible combination of the values b and c. so, for every bundle Z:(b, c), we are able to calculate U(b, c)
True
2. If the preference relation is monotonically decreasing and convex, then in a diagram, indifference curves are upward – sloping and concave and never cross. So that preferred sets are nested
True or False
If there is a consumer who faces two consumption bundles Z1 and Z2, where Z2 is alternative to Z1. Both lie on the same indifference curve I. so the consumer should consider Z1 and Z2 to be perfect complements
If there is a consumer who faces two consumption bundles Z1 and Z2, where Z2 is alternative to Z1. Both lie on the same indifference curve I. so the consumer should consider Z1 and Z2 to be perfect complements
The demand for product X depends on the price of product X as well as the average household income (Y) according to the following relationship
Qdx = 400 - 10 P + 0.001Y
The supply of product X is positively related to own price of product X and negatively dependent upon W, the price of some input. This relationship is expressed as:
Qsx = 60 + 5 P - 2 W
Given that Y = 10,000 and W = 6, what is the:
1. Equilibrium price?
Number
2. Equilibrium quantity?
Number
Suppose that income increases to 20,000 and W remains constant. What is the new:
3. Equilibrium price?
Number
4. Equilibrium quantity?
Number
Assuming that income remains constant at 20,000 and W increases to 11, what is the new:
5: Equilibrium price?
Number
6. Equilibrium quantity?
Qdx = 400 - 10 P + 0.001Y
The supply of product X is positively related to own price of product X and negatively dependent upon W, the price of some input. This relationship is expressed as:
Qsx = 60 + 5 P - 2 W
Given that Y = 10,000 and W = 6, what is the:
1. Equilibrium price?
Number
2. Equilibrium quantity?
Number
Suppose that income increases to 20,000 and W remains constant. What is the new:
3. Equilibrium price?
Number
4. Equilibrium quantity?
Number
Assuming that income remains constant at 20,000 and W increases to 11, what is the new:
5: Equilibrium price?
Number
6. Equilibrium quantity?
Assume that the real exchange rate is equal 4 US goods/CAN goods. Also, assume that P
US = 1 and P CAN = 2
as well as that there are no transportation costs and all goods are tradable. Suppose that there is a Canadian investor looking to invest C$1, 000 by buying goods in one market and selling them in the other. What is the maximum profit the investor can make if she takes advantage of the arbitrage opportunity (express profits in C$)?
US = 1 and P CAN = 2
as well as that there are no transportation costs and all goods are tradable. Suppose that there is a Canadian investor looking to invest C$1, 000 by buying goods in one market and selling them in the other. What is the maximum profit the investor can make if she takes advantage of the arbitrage opportunity (express profits in C$)?
Consider an example of the prisoner's dilemma where 2 firms are making sealed bids on a contract and each firm is allowed to bid either $100 or $180. If both firms bid the same price, the job is shared equally and each firm earns half the value of its bid. Otherwise the lowest bidder wins the contract and receives the full value of its bid (and the other bidder earns zero). The cooperative outcome in this situation is
Assuming a consumer consumes commodity X1 to the power of one and half quantities and 1 quantity commodity X2 after spending $3 on X1 and $4 X2.
i.Compute the optimum quantities of X1 and X2 that gives the consumer highest level of satisfaction.
ii.Algebraicaly verify if the suficient condition is met using relevant Hessian Bordered Matrix.
i.Compute the optimum quantities of X1 and X2 that gives the consumer highest level of satisfaction.
ii.Algebraicaly verify if the suficient condition is met using relevant Hessian Bordered Matrix.
A monopolist faces a linear demand for its product and has a flat marginal and average cost of production. An innovation lowers the cost of production by $1 per unit. Use the graph to show the profit-maximizing monopolist’s choice and the changes due to the innovations.
a. How much will the price change as the result of the innovation?
b. How much will profit per unit change as the result of the innovation?
c. Summarize: who benefits from the innovation? Explain in 2-3 sentences.
a. How much will the price change as the result of the innovation?
b. How much will profit per unit change as the result of the innovation?
c. Summarize: who benefits from the innovation? Explain in 2-3 sentences.
Suppose that: C = 200 + 0.8 Y find:
1) MPC will equal
1) MPC will equal
Economics
consider the following comment: "It's easy to see why the bagel store is doing well; it's an attractive place, its prices are competitive, it doesn't have much competition, and there's a new office building nearby".
a) How many demand factors are cited here to explain the store's success?
b) Which one(s) would economists want to hold constant? Which one(s) would they vary in order to determine the quantities of bagels the store could sell?
a) How many demand factors are cited here to explain the store's success?
b) Which one(s) would economists want to hold constant? Which one(s) would they vary in order to determine the quantities of bagels the store could sell?
Economics
As a student, what can we do to help in achieving the National Development of our country?
