If you make $800 from a lucrative side business selling snack food in dorms, how much would you save if your marginal propensity to consume is 0.75? (do not include the dollar sign in your answer).
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If you make $800 from a lucrative side business selling snack food in dorms, how much would you save if your marginal propensity to consume is 0.75? (do not include the dollar sign in your answer).
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- What happened when income is zero and you must have still consume to surviveSuppose you have a monthly income of $1000, $850 in monthly expenses, and you can put money in a savings account that yields a monthly interest rate of 4%. Create a budget constraint showing the trade-off between present consumption (horizontal axis) and future consumption (vertical axis). How much will you have in the future if you choose to consume $850 now? Show this point on your budget constraint.The utility function for commuting is u(w, t, c) = –11 · w – 3 · t – 15 · c, where w is walking time (in minutes), t is total travel time (in minutes), and c is cost (in £). How much is a typical consumer willing to pay to reduce total travel time by an hour? Enter your numerical answer in the box provided (round your answer to 1 decimal place):
- If your annual demand for renting videos is P = 7.5 - 2.7Q, If purchasing an membership guarantees that you can rent as movies as you like for $ 0.14 per video. How many movies will you rent per year? 2.72 What is the most that you will pay the for the annual membership? $ 3.8Is it irrational to spend all your current disposable incomeFind consumption if income is $300 and APC is 0.43
- It takes Richard two hours round-trip to drive from where he lives in Fayetteville to Raleigh. He currently plans to take seperate trips to purchase a new car and a new motorcycle. In Fayetteville, a new car costs $25,000: in Raleigh the new car costs 12% less or $22,000. In Fayetteville, a new motorcycle costs $15,000: in Raleigh, a new motorcycle costs 16% less or $12,600. Is Richard more likely to purchase one of these goods in Raleigh?Example: U(X,Y) = (XY)-5, Px =2, Px = 1, M = 10 • What will be the consumer's optimal consumption? ●Stan Moneymaker needs 15 gallons of gasoline to top off his automobile’s gas tank. If he drives an extra eight miles (round trip) to a gas station on the outskirts of town, Stan can save $0.10 per gallon on the price of gasoline. Suppose gasoline costs $3.90 per gallon and Stan’s car gets 25 mpg for in-town driving. Should Stan make the trip to get less expensive gasoline? Each mile that Stan drives creates one pound of carbon dioxide. Each pound of CO2 has a cost impact of $0.02 on the environment. What other factors (cost and otherwise) should Stan consider in his decision making?
- Compile a list of consumption behaviours that you consider unethical. For each behaviour listed, explain why you view it as wrong. Also, for each behaviour listed, discuss the possible reason a person engaging in that practice may use to justify itIf corn cost $.55 per pound and protein supplement cost $.12 per pound what is the maximum amount of corn purchase with a $2200 budget?You have £20 per week to spend, and two possible uses for this money: telephoning friends back home, and drinking coffee. Each hour of phoning costs £2, and each cup of coffee costs £1. Your utility function is U(X,Y) = XY, where X is the hours of phoning you do, and Y the number of cups of coffee you drink. What are your optimal choices? What is the resulting utility level? You can use the standard result on the constrained maximization of such a function, but must state it clearly. Now suppose the price of telephone calls drops to £1 per hour. What are your optimal choices? What is the resulting utility level? How much income per week will enable you to achieve the same quantities at the new prices as the ones you chose before? What income will enable you to attain the same utility as you did before? Comment on your answer in the context of equivalent variation and compensating variation.
