HW on the Long-Run Macro Model
Diane K. Monaco
[Macro Model LR] Consider the following GDP equation data (Macro Model) for an economy:
Y= C + I + G + (EX - IM)
C= 1500 + (mpc) Y
I = 1250
G = 800
(EX - IM) = -250
1. Calculate the multiplier (M) and equilibrium GDP using the above LR Macro Model and an mpc = .80
2. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 500, G = 1000, I =2770, (EX - IM) = -250, and MPC = 0.72
3. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 550, G = 1600, I =1700, (EX - IM) = 300, and MPC = 0.69
4. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 700, G = 1400, I =1250, (EX - IM) = -250, and MPC = 0.78
5. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 680, G = 2600, I =1970, (EX - IM) = 300, and MPC = 0.82
6. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 1200, G = 1850, I =1390, (EX - IM) = 270, and MPC = 0.72
7. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 1360, G = 1300, I =2200, (EX - IM) = -150, and MPC = 0.69
8. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 1100, G = 2350, I =1250, (EX - IM) = -250, and MPC = 0.78
9. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 2000, G = 3400, I =1800, (EX - IM) = 280, and MPC = 0.82
10. Calculate the multiplier (M) and equilibrium GDP for the following:
Autonomous Consumption (dissaving) = 2240, G = 1900, I =1150, (EX - IM) = 350, and MPC = 0.84
HW on Marginal Utility
Diane Monaco
[1] Assume that the consumer will use their entire budget to purchase the two goods. Based on the data below what is the best (utility maximizing condition) outcome the consumer can achieve?
TABLE 1 Illustration of Consumer Equilibrium. Price of good 1 = $3, Price of good 2 = $1, Budget = $5
|
Units of good 1
|
MU of good 1
|
MU/price of good 1
|
Units of good 2
|
MU of good 2
|
MU/price of good 2
|
|
1
|
24
|
8
|
1
|
9
|
9
|
|
2
|
18
|
6
|
2
|
8
|
8
|
|
3
|
12
|
4
|
3
|
5
|
5
|
|
4
|
6
|
2
|
4
|
1
|
1
|
[2] Assume that the consumer has no budget limit to purchase the three goods. Based on the data below what is the best (utility maximizing condition) outcome the consumer can achieve?
Price and utility information for products A,B and C in Mils
|
Units of Product
|
Product A
|
Product B
|
Product C
|
|
Marginal Utility
|
Marginal Utility per $
|
Marginal Utility
|
Marginal Utility per $
|
Marginal Utility
|
Marginal Utility per $
|
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
|
1
|
20
|
20
|
36
|
12
|
40
|
8
|
|
2
|
15
|
15
|
24
|
8
|
35
|
7
|
|
3
|
11
|
11
|
15
|
5
|
30
|
6
|
|
4
|
8
|
8
|
9
|
3
|
25
|
5
|
|
5
|
6
|
6
|
6
|
2
|
20
|
4
|
[3] Assume that the consumer has no budget limit to purchase the two goods. Based on the data below, and if the Price of X is $1 and the Price of Y is $2, what is the best (utility maximizing condition) outcome the consumer can achieve?
|
Quantity
|
Total Utility of X
|
Total Utility of Y
|
|
1
|
24
|
85
|
|
2
|
42
|
130
|
|
3
|
56
|
160
|
|
4
|
66
|
185
|
|
5
|
74
|
200
|
|
6
|
80
|
210
|
|
7
|
84
|
215
|
HW on Production and Costs
Diane Monaco
[1] Complete the following cost table directly below:
|
Output
|
Total Cost
|
Fixed
costs
|
Variable
cost
|
Marginal
cost
|
Average cost
|
Average fixed cost
|
|
0
|
30
|
|
0
|
|
|
|
|
1
|
|
|
10
|
|
|
|
|
2
|
|
|
18
|
|
|
|
|
3
|
|
|
22
|
|
|
|
|
4
|
56
|
|
|
|
|
|
|
5
|
64
|
|
|
|
|
6
|
|
6
|
76
|
|
|
|
|
|
|
7
|
|
|
|
15
|
|
|
|
8
|
|
|
|
|
15
|
|
[2) Complete the fo lowing cost table directly below:
|
Units of Output
|
TC
|
TFC
|
TVC
|
ATC
|
AFC
|
AVC
|
MC
|
|
0
|
20
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
|
3
|
|
3
|
|
|
|
|
|
4
|
|
|
4
|
|
|
|
12
|
|
|
|
|
5
|
75
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
86
|
|
8
|
|
|
|
|
|
|
|
|
9
|
|
|
360
|
|
|
|
|
[3) Complete the following profit table directly below:
|
Q
|
P
|
TC
|
TR
|
MR
|
MC
|
PROF
|
|
0
|
$5
|
$9
|
|
|
|
|
|
1
|
$5
|
$10
|
|
|
|
|
|
2
|
$5
|
$12
|
|
|
|
|
|
3
|
$5
|
$15
|
|
|
|
|
|
4
|
$5
|
$19
|
|
|
|
|
|
5
|
$5
|
$24
|
|
|
|
|
|
6
|
$5
|
$30
|
|
|
|
|
|
7
|
$5
|
$45
|
|
|
|
|
[4) Complete the following profit table directly below using a Price (P) = 50:
|
OUTPUT
|
PRICE
|
REVENUE
|
COST
|
PROFIT
|
|
1
|
|
|
200
|
|
|
2
|
|
|
210
|
|
|
3
|
|
|
220
|
|
|
4
|
|
|
231
|
|
|
5
|
|
|
243
|
|
|
6
|
|
|
256
|
|
|
7
|
|
|
270
|
|
|
8
|
|
|
285
|
|
|
9
|
|
|
301
|
|
|
10
|
|
|
320
|
|
|
11
|
|
|
345
|
|
|
12
|
|
|
375
|
|