Re correction I. Test 1 to Microeconomics. Thomas Vodanovic
1)
A)
First we have to be clear about the law of downward sloping demand, which states that as price increases, quantity demanded decreases, ie there is an inverse relationship between price and quantity demanded, this law no longer fulfilled only with so-called Giffen goods, which have positive slope, since increasing their prices increase demand.
The income effect says that if my income is for the consumption of 2 goods, by reducing the relative price of one will end up getting a larger amount of good that is cheaper with this alters the amount of money that destin�bamos to each well.
The substitution effect, however, indicates that seeks the greatest benefit at the lowest possible price.
It is also important to distinguish inferior goods from superiors. With more than my income increase my quantity demanded increases while in the lower exact opposite happens, as my income increases, quantity demanded decreases my.
B)
In order to consume these milk cartons must have a high valuation, as would otherwise inferior goods. If consumption is to ensure a minimum of 2 boxes of milk per month, it is essential to place a grant to produce a drop in milk prices, and therefore an increase in real income. Thus the substitution effect is positive and the income effect must also be so that they will consume a greater quantity of milk.
2. balance and tax in Neverland.
A )
Individual demand: Qdi = 15 – Pd / 10
Consumer Total: 10 children
Qdt = number of individual consumer demand
Qdt = 10 � Qdi
Q d = 150 – P d
B )
Qdt = 150 – Pt
Qs = 2Ps
Then:
50 = P
If Ps = Pd = 50, then:
Qs = 2Ps
Qs = 2 � 50
P mighty = 50 and Q (Amount Balance) = 100
C )
In equilibrium:
Consumer Surplus = 5000
Producer Surplus = 2500
D )
Tax = 15 � unit
Pd = 150 – Qd
If Qs = Qd
Then the new equilibrium quantity is:
Pd – Ps = 15
300 – 2Q – Q = 30
Q = 90
The price paid by consumers will be:
Pd = 150 – Qd
Pd = 150 to 90
P D = 60
The price received by producers will be:
Qs = Ps / 2
P s = 45
E )
Are worse, because the new consumer surplus will be 4050 and 5000 was previously, so the tax decreased while generating a social loss of 75.
Hook raises 15 per unit consumed, multiplied by the 90 units consumed, giving as a collection is 1350
F ) Children are willing to pay up to 950
3. Rational choice and demand.
A ) See Graph
B ) See Graph
C ) Both increase your income in the same proportion. See Graph
D) They have the same elasticity Income and consuming the same. n = 1
E )
Pp = 20, Pp = 10, I = 360
For Christopher:
Pmax = 18, Smax = 36
TMSSp, s (Kitts) = S = 2P
I = Pp + Ps * P * S
360 = 20 * P + 10 * 2P
9 = 8 = P and S
To Margarita:
Pmax = 18, Smax = 36
I = Pp � Ps � P + S
360 = 20x + 10x
12 = X = S = P
F )
The relationship that Christopher has both income effect and substitution effect in the situation of bleeding is as follows:
On the income effect reduces the use of indentation.
Substitution effect of increased consumption of bleeding.
As seen in the total effect, the substitution effect is equal to the income effect on bleeding, so it ends up consuming the same indentation as before after the increase in the price of the paella.
G ) See Graph
H ) Christopher has greater price elasticity Margarita (1 to 0.6) so Christopher is more elastic, as it has a larger capacity replacement.
4. Intertemporal consumption.
A )
In Stephen:
Maximum expenditure for today: I1 + I2 / 1 + r = 1090
Maximum expenditure for tomorrow: (1 + r) x I1 + I2 = 1200
In Michael
Maximum expenditure for today: I1 + I2 / 1 + r = 1110
Maximum expenditure for tomorrow: (1 + r) x I1 + I2 = 1009
B )
TMSS c1, c2 = 1.1
1.1 � C1 = C2
P o Stephen:
1090 C1 = C1 + 1.1 / 1.1 = 2C1 � C 1 = 545
C2 = C1 = 1.1 � 599
To Michael :
1009 = C1 C1 + 1.1 / 1.1 = 2C1 � C 1 = 504
C2 = C1 = 1.1 � 554 = C 2
C )
To Stephen:
D = I2 – C2 = 1000 – 545 = 455 to 455 saves Esteban
To Michael:
D = I1 – C1 = 100 – 504 = -404 A is negative, Miguel calls 404
D )
r = 20%, Ie1 = 1000, IE2 = 100 = 100 Im1, Im2 = 1000
1.2 � C1 = C2
To Stephen:
Maximum expenditure for today: I1 + I2 / 1 + r = 1000 + 100 / 1.2 = 1083
Maximum expenditure for tomorrow: (1 + r) x I1 + I2 = 1.2 � 1000 + 100 = 1300
1083 C1 = C1 + 1.2 / 1.2 = 2C1 � C 1 = 541
C2 = C1 = 1.2 � 649 = C 2
To Michael:
Maximum expenditure for today: I1 + I2 / 1 + r = 100 + 1000/1, 2 = 933
Maximum expenditure for tomorrow: (1 + r) x I1 + I2 = 1.2 � 100 + 1000 = 1120
933 = C1 C1 + 1.2, / 1.2 = 2C2 � C 1 = 466
C 2 = 1.2 � C1 = 559
E ) If we raise the interest rate market behavior should be equal to that of Stephen, because it saves Esteban, unlike Michael, who instead of saving into debt to consume.
5. Reading:
A)
For the author, the economic approach may be applicable to a wide number of areas of human life, that is, all kinds of phenomena, even those we think are unrelated to the economic area can be analyzed through the economic approach.
It is very important to use the economic approach to make rational decisions in order to meet the many needs we have over scarce resources. The objective of this approach is to address this criterion rightly and profit. Economists are empirical arguments or ex post, so the criteria used to determine whether this approach is either not important or “valid” must be other evidence, they also refute empirical.
The man in all his elections seeks to maximize the benefits at the lowest possible cost, because it always evaluates the costs and benefits thus choosing a rational manner.
B)
Economists suggest that people act always looking to maximize a variety of preferences in a world where the elements are scarce, so that the answers given by economists are always referring to establish which is the best decision which is evaluating the further maximizing the individual’s preferences, which is accomplished by performing a comprehensive analysis that evaluates the costs and benefits embedded in these decisions.
In his analysis of preferences using 2 assumptions.
The assumptions used in their analysis of the profile are the stability and flexibility of preferences. The first concerns that economists assume that during the time of analysis the individual’s preferences do not change, what changes is the opportunity to meet given preferences. In contrast, the second assumption holds that individuals can substitute their personal goals. These assumptions largely determine the answers given by economists, as in the example given by Fontaine on decisions that contain content valoric, that make preferences become more rigid, decreasing in these situations the validity of such assumptions .
Fontaine referred to as “social engineers” of the economists who make policy recommendations supported in their economic analysis. In this sense, economists recommend policies they describe as efficient in terms of its ability to further lower cost benefit, that is, they get positive profits.