Economics

The price elasticity of demand for oatmeal is constant and equal to −1. When the price of oatmeal is $10 per unit, the total amount demanded is 6,000 units. a) Write an equation for the demand function. ------------. Graph this demand function below with blue ink. (Hint: If the demand curve has a constant price elasticity equal to _, then D(p) = ap_ for some constant a. You have to use the data of the problem to solve for the constants a and _ that apply in this particular case.) (b) If the s...

The following is intended to explore what kinds of own-price demand relationships are logically possible in a two-good model with exogenous income (unless otherwise specified). For each of the following, indicate whether the relationship is possible or not and explain: (a) Tastes are homothetic and the own-price demand relationship is positive. (b) A good is inferior and its own-price relationship is negative. (c) In a model with endogenous income, a good is normal and its own-price demand rel...

Tastes of a Cocaine Addict: Fred is addicted to cocaine. Suppose we want to model his tastes over cocaine and other goods. A: I propose to model his tastes in the following way: For any two bundles A and B of “grams of cocaine” and “dollars of other consumption,” I will assume that Fred always prefers bundle A if it contains more grams of cocaine than bundle B. If bundles A and B contain the same amount of cocaine, then I will assume he prefers A to B if and only if A contains more other...

Suppose that Mozilla and Microsoft each develop their own versions of an amazing new Web browser that allows advertisers to target consumers with great precision. Also, the new browser is easier and more fun to use than existing browsers. Each firm is trying to decide whether to sell the browser or to give it away. What are the likely benefits from each action? Which action is likely to occur?

7-14 The Electro comp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each air conditioner takes 3 hours of wiring and 2 hours of drilling. Each fan must go through 2 hours of wiring and 1 hour of drilling. During the next production period, 240 hours of wiring time are available and up to 140 hours of drilling time maybe used. Each air conditioner sold yield...

a) Explain the concepts of marginal propensity to consume (MPC) and marginal propensity to save (MPS). (2pts) b) What is the MPC for this economy? (2pts) c) Explain the concepts of the autonomous spending and tax multipliers. (2pts) d) What is the autonomous spending multiplier for this economy? (2pts) e) What is the equilibrium level of income for this economy? (3pts) f) Suppose that the full employment level of output for this economy is 4000. What sort of output gap is Matata island facing? (...

• Treating Cost/Mile as the dependent variable, develop an estimated regression with Family-Sedan and Upscale-Sedan as the independent variables. Discuss your findings. • Treating Value Score as the dependent variable, develop an estimated regression equation using Cost/Mile, Road-Test Score, Predicted Reliability, Family-Sedan, and Upscale-Sedan as the independent variables. • Delete any independent variables that are not significant from the estimated regression equation developed in par...

Find an article in a recent newspaper or magazine illustrating a change in price or quantity in some market. Analyze the situation using economic reasoning as follows: 1. Has there been an increase or decrease in demand? Factors that could shift the demand curve include changes in preferences, changes in income, changes in the price of substitutes or complements, or changes in the number of consumers in the market. (marks 5) 2. Has there been an increase or decrease in supply? Factors that could...

George Johnson earns $5 per hour in his job as a truffle sniffer. After allowing time for all of the activities necessary for bodily upkeep, George has 80 hours per week to allocate between leisure and labor. Sketch the budget constraints for George resulting from the following government programs.

Federal Reserve Statistics Worksheet Answer all of the questions. Make sure to explain in words or show mathematically how you arrived at your answers 1. Rounding to the nearest 0.1 percent, calculate the mean, median and mode for the Consumer Price Index - All Urban Consumers (CPI-U) for 2012, 2011 and 2002, separately. Show your work. If the three averages differ, explain why. Do you think the Fed should have been more concerned about inflation in 2012 than they were in 2011 or 2002? Why, or w...