Economics Answers

Assume a hypothetical consumer good X and good Y. the price of good X is 1 and price of good Y is 3 and the consumer budget is birr 10 for the two goods. where: Qx is quantity of good X, Qy is quantity of good Y and TUx and TUy is total Utility from consuming good X and Good Y respectively
Qx. TUx. Qy TUy
0. 0. 0. 0
1. 10 1. 24
2. 19. 2. 45
3. 27 3. 63
4. 34. 4. 78
5. 40. 5. 87
6. 44. 6. 90
Based on this
At what amount of consumption dose diminishing marginal utility startes to occurs for the two goods

Why are all giffen goods inferior goods but not all inferior goods are giffen

Goods Market Money Market
C = 250 + 0.8YD L = 0.25Y – 62.5i
YD = Y + TR – T Ms/P = 250
T = 100 + 0.25Y
I = 300 – 50i
G = 350; TR = 150

Goods market equilibrium condition: Y = C + I + G + X-M
Money market equilibrium condition: L = Ms/P
c) What are the equilibrium levels of income (Yo) and interest rate (io)

Suppose an economy (Home) produces only two goods- Magnets and Neckties. Both goods require both capital and labour to produce. Assume capital and labour cannot be substituted for one another in the production process. The economy has 600 units of capital and 800 units of labour available. It takes 4 units of labour and 2 units of capital to make each Magnet and 2 units of labour and 6 units of capital to make each Necktie

Obesity and smoking are both linked to numerous adverse health consequences, including heart disease, cancer, and strokes, among others. The Affordable Care Act permits health insurance companies to charge people higher premiums if they smoke or are obese. But the law forbids the companies from charging higher premiums or denying coverage to people who have suffered strokes or have heart disease or cancer.

Goods Market Money Market
C = 250 + 0.8YD L = 0.25Y – 62.5i
YD = Y + TR – T Ms/P = 250
T = 100 + 0.25Y
I = 300 – 50i
G = 350; TR = 150

Goods market equilibrium condition: Y = C + I + G + X-M
Money market equilibrium condition: L = Ms/P

a) What is the equation that describes the IS curve (YIS)?

3. The value of manufactured goods (things made in factories and plants) produced each year in the United States has more than doubled over the last 30 years. Also over the last 30 years the number of Americans employed in manufacturing has significantly decreased. What does this tell you about the productivity of workers in the manufacturing industry?

The Current U.S. government spending is $4.746 trillion. That's the federal budget
for fiscal year 2020 covering October 1, 2019, to September 30, 2020. It's 21% of gross
domestic product. That means that Government Spending in the United States has
increased under the current U.S. Administration. Additionally, last year the Congress
passed a tax reform that, among other effects, cut payroll taxes:

i) Can you establish the macroeconomics effects of these policies on consumption,
investment, interest rate and savings? Use the models (consumption model and loanable
funds market) and the graphs. Explain.

Consider the macro model (i) Y = C + ¯I + G, (ii) C = b(Y − T) and (iii) T = tY where the parameters b and t lie in the interval (0, 1), Y is the gross domestic product (GDP), C is consumption, ¯I is total investment, and T denotes taxes, and G is government expenditure.
(a) Express Y and C in terms of ¯I, G and the parameters.
(b) What happens to Y and C if t increases?

The relationship between nominal exchange rate and relative prices. From annual
observations from 1985 to 2005, the following regression results were obtained,
where Y = exchange rate of the Canadian dollar to the U.S. dollar (CD_$) and X =
ratio of the U.S. consumer price index to the Canadian consumer price index; that is,
X represents the relative prices in the two countries:
ˆ 0.912 2.250 2 0.440
. 0.096
t t Y X r
s e
= - + =
=
（1）Interpret this regression. How would you interpret r2 ?
（2）Does the positive value of t X make economic sense? What is the underlying
economic theory?
（3）Suppose we were to redefine X as the ratio of the Canadian CPI to the U.S. CPI.
Would that change the sign of X? Why?