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Jane's utility function is U(x,y) = 2 x2 y with associated marginal utility functions MUx = 4xy and MUy = 2x2. Jane has income I and prices of x and y are respectively given by Px and Py. a) Determi
Assume that demand for a commodity is represented by the equation P = 10 - 0.2 Q d, and supply by the equation P = 2 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respective
A newspaper is considering buying locked vending machines to replace open newspaper racks in the downtown area. The vending machines cost $45 each. It is expected that the annual revenue from sellin
A car dealer leases a small computer with software for $5000 per year. As an alternative he could buy the computer for $7000 and lease the software for $3500 per year. Anytime he would decide to swi
A retailer finds that the demand for a very popular board game averages 100 per week with a standard deviation of 20. If the seller wishes to have adequate stock 95% of the time, how many of the gam
Suppose you inherit $10,000 and decide to use the money to start a lawn-care business. You purchase a truck and a mower for $10,000 and start mowing lawns. Your annual cost for fuel and other suppli
an event you believe to have a 60 percent probability; otherwise the shares pay a zero return. Shares of Elephant Inc will pay 8 percent if the Republicans are elected (a 40 percent probability), ze
What happens to your answers in b.), c.), and d.) if the tax rate decreased to 8% What was the original expenditure multiplier in this country What is the multiplier after the change in the tax regi
(c) How much was the total interest payment in 2010 that can be used for tax deduction (d) After the beginning of 2011, this person decided to pay $600 more each month, when will the loan be paid off
A corporate bond has a face value of $10,000 with a bond rate of 6%. The interest of the bond will be paid quarterly. The bond will mature in 10 years. If the bond is sold at $7,500 on the market, w
b) What is the rate of inflation between 2007 and 2008 if the money supply in 2008 is 1,100 instead of 1,050 c) What is the rate of inflation between 2007 and 2008 if the money supply in 2008 is 1,100
The GDP deflator in Econoland is 200 on January 1, 2005. The deflator rises to 242 by January 1, 2007, and to 266.2 by January 1, 2008. What is the annual rate of inflation over the three year period
Suppose Bill is on a low-carbohydrate diet. He can eat only three foods: Rice Krispies, cottage cheese, and popcorn. The marginal utilities for each food are tabulated below. Bill is allowed only 16
Smiling Cow Dairy can sell all the milk it wants for $4 a gallon, and it can rent all the robots it wants to milk the cows at a capital rental price of $100 a day. If faces the folling productions s
Compute the annual depreciation allowances and the resulting book values using the double declining depreciation method for three possible salvage values: (a) $2000; (b) $778; (c) $0 With considerat
On her 23rd birthday a young female engineer decides to start saving toward building up a retirement fund that pays 8% annual interest, compounded quarterly (market interest rate). She feels that $6
A facility requires $2500000 in debt capital. The plan is to sell twenty-year bonds that pay 4.2 percent per year, payable quarterly, at a 3 percent discount on the face value. The facility has an e
Suppose the federal government needs to balance the budget, which means that when the government spending increases, taxes must increase equally. In this case, government spending multiplier is call
From the Keynesians, Y = C + I + G + NX can be transformed into a theoretical model. In particular, assume that the consumption C = A + mpc (Y-T), where A is a constant, mpc is the marginal propensi
Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip
Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other good. The price of X and Y are respectiv
The flexibility of the supply curve of rented apartments before the law was passed is 0.15 Before the law was passed, there was a rise in the demand for rented apartments, and this rise in dema
Now the gov decided to pass a law that the cost to rent should not exceed $375 per apartment. In order to minimize the damage such a law will have on apartment owners, the government decided to allow
Greg, who is five years from retirement, receives a $10,000 bonus at work. He is trying to decide whether to save this extra income in an IRA account or in a regular savings account. Both accounts e
What is the annual equivalent value of a geometrically increasing series of payments which has first-year base of $50,000 increasing by 10% per year for 10 years with an interest rate of 8% compound