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Draw a set of indifference curves for a person that is risk neutral (a person that does not care about risk one way or the other).
Consider the following equations for a small open economy for both the goods and money markets.
C = 3000 + 0.8Yd; T = 1000 + 0.3Y; G = 6000; TR = 500; I = 4000 + 0.24Y – 100r; M = 3000 + 0.2Y; X = 2000; LP = 1000 + 0.15Y; LT = 2000 + 0.25Y – 15r; Ls = 1000 – 35r; MS = 40,000; P= 4
a. Derive both the IS and LM equations for the economy and compute the Equilibrium level of Income and Interest Rate.
b. At this equilibrium level of income and interest, compute the levels of disposal income, total transactions demand for money, investment demand and the value of net exports.
c. Suppose the government raises govt. expenditure by 20% in order to increase aggregate demand. Show how this policy results in the crowding out effect.
Suppose the government imposes a price cap on bottle show the effect in bottled water market
Consider the following equations for a small open economy for both the goods and money markets.
C = 3000 + 0.8Yd; T = 1000 + 0.3Y; G = 6000; TR = 500; I = 4000 + 0.24Y – 100r; M = 3000 + 0.2Y; X = 2000; LP = 1000 + 0.15Y; LT = 2000 + 0.25Y – 15r; Ls = 1000 – 35r; MS = 40,000; P= 4
a. Derive both the IS and LM equations for the economy and compute the Equilibrium level of Income and Interest Rate.
b. At this equilibrium level of income and interest, compute the levels of disposal income, total transactions demand for money, investment demand and the value of net exports.
c. Suppose the government raises govt. expenditure by 20% in order to increase aggregate demand. Show how this policy results in the crowding out effect.
3. Why does a demand curve generally slope downward
Assume the price of good Y rises from Birr 120 to Birr 160 per Kg. and as a result, the consumer demand for good X increases from 50 Kg to 90 Kg. Calculate the cross elasticity of demand of X for Y. 9. Suppose price of a good falls from Birr 12 to Birr 10 per unit, as a result its quantity demanded increases from 100 to 120 units. A) Find price elasticity of demand, and demand for a good is elastic, inelastic, or unit elastic. B) Calculate TR (Total Revenue) at price Birr 12 & 10. C) What is the relationship between TR and price elasticity of demand?
The quantity supplied of a commodity at a price of Birr 10 per unit is 500 units. Its price elasticity of supply is 0.5 A) Calculate the price at which its quantity supplied is 600 units. B) What quantity of this commodity will the seller supplied when the price rise at Birr 12 per unit? C) What quantity of this commodity will the sellers supply when price rises by Birr 4 per unit?
Assume that the dd & ss function of good Y is given as follows respectively; Qdy =30 - 2Py and Qsy = 16Py - 60. Answer the following questions on the basis of the given information. A) Find the equilibrium price and equilibrium quantity B) What price would bring for the supply of 60 units of good Y? State the condition of the market for the good at the price. C) At what price would no amount of the good be supplied? D) What would be the amount demanded if good Y were a free good?
Given the following market demand and supply function of good X is respectively Qd= 100 - 2P and P = 1/2Qs + 10, find the equilibrium price and equilibrium quantity.
Suppose the slope of linear demand curve equals -2, the average price equals 8 Birr and the average quantity demand = 100 units, A) Calculate the arc-elasticity of demand. B) Is demand elastic or inelastic? C) Interpret the result
#340153 on Dec 2023