In the context of the two- period model without leisure we have studied in class, Define...

In the context of the two- period model without leisure we have studied in class,

Define a competitive equilibrium as carefully as possible and indicate the elements involved in the definition. Make sure you clearly explain the problem and the the exogenous/endogenous variables for each decision maker.

Expert Solution

Rahul Sunny answered 9 months ago

Incorporate household production in the income- leisure model we derived in the class and derive the...

Incorporate household production in the income- leisure model we derived in the class and derive the slopes of the budget constraint and indifference curve. Show the condition at which utility maximization will occur for this model.

Think of this question in the context of the two-period model. Households hold stocks as part...

Think of this question in the context of the two-period model. Households hold stocks as part of their financial wealth. Assume that we recently observe stock prices rising. Also assume that consumers believe that changes in stock prices are temporary. What affect would this have on the correlation between stock price indices and consumption? Explain.

Recall the simple two-period model we covered during class: when the demand curve is stable over...

Recall the simple two-period model we covered during class: when the demand curve is stable over time and the marginal cost (of extraction) is assumed to be constant, the value of the marginal user cost was shown to rise over time at the rate ?? in an efficient allocation. With the aid of appropriate diagrams, one can generalize the results to loner time periods: 1) Discuss what happens to the efficient allocation path when we extend the time horizon from...

Neurophysiology is based on a reductionist approach. The model of the action potential we have studied...

Neurophysiology is based on a reductionist approach. The model of the action potential we have studied was developed from animal studies. The first researchers started with a squid neuron, and actually just cut off the axon and threw away the rest of the cell. Never mind about the squid's brain. While this approach has yielded some impressive results, reductionism and mechanism (treating the brain like a machine) may have some limitations. Do dogs have feelings? How about earthworms? How about...

In this class we have studied numerous financial crises in developing countries. While each of these...

In this class we have studied numerous financial crises in developing countries. While each of these crises is different, there are patterns that re-occur and mistakes that are repeated over and over again. 1) Define and discuss what is a financial crisis? (Hint: there is no definitive answer.) 2) Why are developing countries more vulnerable to financial crises? 3) What is the typical pattern for a financial crisis? 4) What role has the IMF played in financial crises in developing...

In the two-period model reviewed in class, both the Current Account and the Trade Balance in...

In the two-period model reviewed in class, both the Current Account and the Trade Balance in period 1 worsen (i.e., decrease) with an anticipated increase in the endowment of period two (ΔQ1=0 and ΔQ2>0)'' Use equations of the optimal allocation of consumption in periods 1 and 2, the trade balance in period 1 and the current account in period 1 to support your answer. No credit without explanation. For simplicity, assume the following lifetime utility function: U(C1,C2)= ln(C1) +β ln(C2)...

We have studied that assets have two kinds of risk: idiosyncratic (specific to the asset) and...

We have studied that assets have two kinds of risk: idiosyncratic (specific to the asset) and systemic (common to all assets). Why is the purpose of separating idiosyncratic risk from systemic risk? When you purchase an asset, do you consider the idiosyncratic risk from systemic risk? Given that systemic risk can be reduced/eliminated by diversification, how much value do you place on diversification?

. Consider the two-firm game of sequential quantity competition that we studied in class. (See slides...

. Consider the two-firm game of sequential quantity competition that we studied in class. (See slides 33-38 in the “Homogeneous products oligopoly.”) Suppose firm A gets to make one more move after firm B makes its choice of QA, but before price and profits are determined. That is, the order of events will be: C(Qi) = 10Qi --> for firms B and A Demand --> P = 40 – 0.01(QA + QB ) i. Firm A announces QA. ii. Firm...

Consider the two-period Neoclassical consumption model seen in class. Suppose that income is measured in dollars....

Consider the two-period Neoclassical consumption model seen in class. Suppose that income is measured in dollars. Let the utility function take the logarithmic form U(C)=ln C, and the representative consumer maximize her lifetime utility subject to her budget constraint. Suppose that income in period 1 is $50,000, income in period 2 is $30,000, ?=1 and ?=5%. Do you think that the consumption profile of the agent in this numerical example is going to be smoother than her income? If so,...

In C++ Define a base class called Person. The class should have two data members to...

In C++ Define a base class called Person. The class should have two data members to hold the first name and last name of a person, both of type string. The Person class will have a default constructor to initialize both data members to empty strings, a constructor to accept two string parameters and use them to initialize the first and last name, and a copy constructor. Also include appropriate accessor and mutator member functions. Overload the operators == and...

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