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Flexible Felix views present and future consumption as imperfect substitutes and he discounts future consumption by a bit to reflect the uncertainties of his life. His utility function is given by U(C_0,C_1 )=3C_0+(4C_1) ⁄ ((1+δ) ) where δ (which is a small positive number) is the discount rate he applies to C_1.
Graph Felix’s indifference curve map.
Show that if 3δ=1+4r, (r= the real interest rate), then Felix is indifferent between C_0 and C_1.
What do you conclude about the relationship between a person’s savings behavior and his or her “impatience”?
If countries can benefit by increasing their consumption possibilities through trade, why do so many countries place restrictions on trade?
A country will likely experience an increase in poverty if
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A factor that would increase the demand for international reserves is
In game theory, a dominant strategy is one _______________
How many years would it take for an investment in year 1 with increases of 10%/yr to have a present worth f $1 million at an interest rate of 7%/yr?
Joy's frozen yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of joy's various outlets, it was found to the Demand curve.
Suppose that macroeconomics forecasters predict that economy will be expanding in near future. How might managers use this information.
Josh is graduating at the end of the academic year with a BS degree in engineering. He already had an offer with a good company for $58,000. He has learned that those who continue along a technical path in the company typically receive increases of 6..
Which of the following is NOT the factor affecting how elastic a demand is?
two accompanying show supply an demand curves for two substitute commodities: regular cell phone and smartphones. A. Show what happens when rising raw material prices make it costlier to produce regular cell phones
Airport baggage handling equipment can be purchased for $80,000 cash (now) or for $84,000 to be financed over 60 months at 0% interest (with annual payments, where the first payment is due at the time of purchase). The sales person states that at lea..
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