Largest increase in current consumption

Assignment Help Microeconomics
Reference no: EM13694602

Assume that your consumption decisions are made according to the permanent income theory. Which of the following would lead to the largest increase in current consumption?

A. winning $10,000 in the lottery

B. taking a new job with a salary that is $10,000 higher than your current salary

C. inheriting $10,000 from a relative

D. obtaining $10,000 by winning a lawsuit

E. getting a one-time $10,000 bonus from your employer

Reference no: EM13694602

Questions Cloud

When the unemployment rate is high : When the unemployment rate is high, we would expect that:
Calculate any depreciation recapture-ordinary losses : An asset with an 8-year ADR class life costs $50,000 and was purchased on January 1, 2001. Calculate any depreciation recapture, ordinary losses, or capital gains associated with selling the equipment on December 31, 2003, for $15,000, $25,000, and $..
Economy can be described by the solow growth model : A hypothetical economy can be described by the Solow growth model. Answer the below questions for this economy by using the following information. What is the steady-state level of capital per worker? What is the level of steady-state consumption per..
What is a perfectly competitive market : What is a perfectly competitive market? What is marginal revenue? How is it related to total and average revenue? How does competitive firm determine the quantity that maximizes profit?
Largest increase in current consumption : Assume that your consumption decisions are made according to the permanent income theory. Which of the following would lead to the largest increase in current consumption?
Country switches from a flexible to a fixed exchange rate : Suppose a country switches from a flexible to a fixed exchange rate. Which of the following will occur as a result of this change?
Suppose households unexpectedly increase consumption : Suppose households unexpectedly increase consumption and the central bank keeps the interest rate fixed. Which of the following will occur as a result of this consumer optimism?
Government spending in a closed economy fiscal policy action : Suppose there is a decrease in government spending in a closed economy fiscal policy action will cause:
Assume that the yield curve is initially upward-sloping : Assume that the yield curve is initially upward-sloping. Now suppose that the central bank announces a large monetary policy contraction. Given this information, we would expect which of the following to occur?

Reviews

Write a Review

Microeconomics Questions & Answers

  Considering the acquisition of new equipment

The Company you work for is considering the acquisition of new equipment. The required initial investments of $45,000 and the projected cash benefits over a three -year project life are $14400, $17340, and $25760;

  Test whether the slope differs from zero

On the basis of the information provided, test whether the slope differs from zero at the 1% level of significance.

  Age distribution of students at community college is given

the age distribution of students at a community college is given belowage in yearsnumber of studentsnbsp fundernbsp

  Will you move upward or downward along the demand curve

The demand curver for your firms product is linear.Based on recent sales data you have determined that at the current price the price elasticty of demand is .80. A. Is the current price on the upper or lower portion of the demand curve

  Explain long run equilibrium and inflation rate

Suppose the annual inflation rate is at 2% and 8.5% of the labor force is currently unemployed. If you were on the Fed's Open Market Committee, what action would you prescribe? How would this affect the economy, the inflation rate, and the unemplo..

  Interest and exchange rates as they impact income statement

While market-based hedging instruments can be used to offset or counter uncertainties in interest rates and exchange rates as they impact the income statement, balance sheet hedges require a different approach.

  How is the time spent on leisure likely to change

As the skill level (and therefore earnings rate) of, say, an architect, computer specialist, or chemist increases, what happens to his or her opportunity cost of doing other things? How is the time spent on leisure likely to change?

  Company faces a number of different fixed and variable costs

Everything looks like a Nail Inc. is a manufacturing company that produces hammers. The company faces a number of different fixed and variable costs.

  Discuss the new equilibrium price and quantity which changes

What happens to the demand curve and the supply curve when any of these determinants change. Give examples of scenarios that would cause a change in demand versus a movement along the same demand curve and supply curve for this product.

  Assume that an economy producing two products skateboards

Assume that an economy producing two products, skateboards and in-line skates, is initially in equilibrium, and that skateboards and in-line skates are substitutes. If consumer preferences shift away from skateboards and toward in-line skates, which ..

  According to the rule for optimal input usage a firm should

according to the rule for optimal input usage a firm should hire a person as long as her marginal revenue product is

  Calculate the expected utility of each project

Calculate the expected utility of each project and identify the preferred project according to this criterion. (c) Is this individual risk averse, risk neutral, or risk seeking? Why?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd