Consumer who has been neither saving nor borrowing

Assignment Help Business Economics
Reference no: EM131084745

Sid is a rational consumer who has been neither saving nor borrowing (he spends exactly his current income). a. Draw a diagram showing Sid’s endowment and current optimal consumption this year and next. b. Show how Sid’s behavior will change if the interest rate falls. Will he start to save or borrow? If so, which?

Reference no: EM131084745

Questions Cloud

Finding the motion vector using sequential search : Finding the motion vector using sequential search
Write steps involved in performing binary search operation : Write the steps involved in performing binary search operation to search an element 56 in the following numbers.
Calculate the correlation coefficient ?x,y : Problem 4.2.6 extended Example 4.1 to a test of n circuits and identified the joint PDF of X, the number of acceptable circuits, and Y, the number of successful tests before the first reject. Write a Matlab function
Use calculus to derive a formula for optimal consumption : Given the utility function U = 4lnC1 + 3lnC2 , use calculus to derive a formula for optimal consumption in period 1 (C1*) and period 2 (C2*), each as a function of the income in each period (M1 and M2), and interest rate r. Then find a formula for th..
Consumer who has been neither saving nor borrowing : Sid is a rational consumer who has been neither saving nor borrowing (he spends exactly his current income). a. Draw a diagram showing Sid’s endowment and current optimal consumption this year and next. b. Show how Sid’s behavior will change if the i..
Difference between interlaced scan and progressive scan : What is the difference between interlaced scan and progressive scan?
Planning to increase the tolls on the bridges : According to an article in the New York Times, in 2011 the Port Authority of New York and New Jersey was planning to increase the tolls on the bridges and tunnels crossing the Hudson River by as much as 50 percent. According to the article, “Revenue ..
Find all integer values : Suppose a and b are positive integers. Find all integer values of - (a2 + ab + b2/ab - 1)
Understanding the limitations of science : How does understanding the limitations of science help in areas where faith and science appear to conflict? are there some limitations related to faith issues? what are they?

Reviews

Write a Review

Business Economics Questions & Answers

  Equivalent to the series of maintenance costs

Costs for maintaining buildings at an industrial complex over a 13-year period are expected to be $3,932 in year 1, increasing at the rate of 15% per year through year 13. At an interest rate of 15% per year, what present worth (at time 0) is equival..

  Is bundling a good idea for consumers

We are seeing a merging of media firms. For example, companies like Verizon now provide phone, cell, TV and internet. A common form of selling services involves putting them together in packages or “bundles” and offering them for a lower price than i..

  What is lisa optimal choice for breakfast now

Illustrate her optimal choice on a graph, using indifference curve-budget line analysis. b. Suppose that the price of a bagel increases to $5. What is Lisa’s optimal choice for breakfast now? You do not need to illustrate this new choice in a gra..

  Calculate the cost index using the nominal gdp

Explain how do you calculate the cost index using the nominal GDP to get the real GDP in billions

  When recession due to decrease in aggregate demand occurs

When a recession due to a decrease in aggregate demand occurs, how can the Central Bank react? What does that reaction look like in the model? What are the long-run implications of the Central Bank is actions in a) and c), respectively?

  Utilize your general knowledge of equilibrium prices

Utilize your general knowledge of equilibrium prices to explain why the previous interest rate is no longer sustainable.

  What is your average tax rate-marginal tax rate

In Taxland, the first $5,000 earned per year is exempt from taxation. Between $5,000 and $20,000, the tax rate is 10 percent. Between $20,000 and $50,000, it’s 15 percent. Above $50,000, it’s 25 percent. You’re earning $75,000 a year. How much in tax..

  Pro trade production growth effect

It is likely that a pro trade production growth effect will lead to an expansion of trade since the presence of inferior goods is relatively rare. Explain.

  Explain what has been happenning in this market

explain how lower coffee bean output in brazil, vietnam, columbia and central america are affecting this market. explain what has been happenning in this market.

  Software developers to develop software for the platform

When the Macintosh computer was introduced in 1982, Apply made it difficult for third party software developers to develop software for the platform. In contrast, Apple made it relatively easy for third party developers to make applications that ran ..

  Marginal cost is constant across firms

What happens to price and output in the Cournot, Bertrand, and Stackelberg models if marginal costs increase by 10 percent? The market demand is p = a-bQ and the marginal cost is constant across firms, i.e. mc1 = mc2 = c. You may consider for two fir..

  Is it possible to tell in which month you buy more eggs

In April, eggs cost $2 per dozen, wine costs $1 per bottle, your income is $120, and you buy 50 dozen eggs. In May, eggs cost 50 cents per dozen, wine still costs $1 per bottle, and your income is $60. Is it possible to tell in which month you are ha..

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