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4. A college student has two options for meals: eating at the dining hall for BDT 6 per
meal, or eating a Star Kabab for BDT 1.50 per meal. Her weekly food budget is BDT
60.
a. Draw the budget constraint showing the trade-off between dining hall meals and Star
Kabab. Assuming that she spends equal amounts on both goods, draw an indifference
curve showing the optimum choice. Label the optimum as point A.
b. Suppose the price of a Star Kabab now rises to BDT 2. Using your diagram from part
(a), show the consequences of this change in price. Assume that our student now spends
only 30 percent of her income on dining hall meals. Label the new optimum as point B.
c. What happened to the quantity of Star Kabab consumed as a result of this price change?
What does this result say about the income and substitution effects? Explain.
d. Use points A and B to draw a demand curve for Star Kabab. What is this type of good
called?
The following are indirect quotations of the dollar against the Swiss franc, the Japanese yen, and the British pound: $1 = SF1.4814 – 1.4828 $1 = ¥124.26 – 124.37 $1 = £0.6419 – 0.6428 (a) Calculate the midpoints in each rate and the direct quotation of each of the above rates. (b) Calculate the cross rates between (i) the Swiss franc and the Japanese yen, (ii) the Swiss franc and the euro, and (iii) the Japanese yen and the euro.
Maximize:
U = alog(X) + (1 − a)log(Y )
subject to:
I = PX X + PY Y
1. Find X* and Y* using the method of Lagrange multipliers.
2. Can we derive the demand function of X and Y in a general form, e.g:
X = f (PX , I)andY = f (PY , I).
3. Please make some conclusions about the demand derived from the
utility function.
4. Note: a special case, please solve the same problem if U=XY.
Plot price on y axis and Quantity on x axis an determine what is the slope (positive or negative)
Price 1 2 3 4 5
Quantity 12 28 42 52 60
The saving function of a random sample of ten families is given as where denote aggregate savings, denotes disposable income real interest rate. The sample data are given in the following table:-
20 25 25 30 35 40 43 42 50 55
100 110 115 120 140 145 145 140 150 160
2 2 3 2 3 4 3 4 5 5
Required:
a) Find the regression equation of the savings on disposable income and real interest rate
b) Estimate the savings when the disposable income is 180 and real interest rate is 6
c) Compute the coefficient of multiple determination and adjusted value
d) Test the significance of the individual regression coefficient at the 5% level of significance
e) Estimate the confidence limits of the individual regression coefficient at the 95% confidence level.
f) Test the overall significance of regression at 5% level.
assume that tom and jerry from a partnership with investment of 88000$ and120000$ separately. Determine the partnership in net income of 88000$ for the division of the partnership net income under the following conditions.
- No agreement concerning division
- Division is made in the ration of their original investment
- Division is made according to the agreement that he rate of 8% allowed on original investment and the remainder divided in the ratio of 2:1
classify the following statements as positive or normative
a. Firms are showing positive response to increase in demand of product.
b. Decision of a worker to work lessdue to lower wages.
c. Government legislation is targeting firms charging too high prices.
list the advantage and disadvantage of corporate form of organization
what are the common reason for partnership dissolution
explain the meaning of the term double taxation at it applies to corporate profit
