Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

problem1.  You are a commuter student at local university. Because of the steep ascend in gasoline prices, your parents decide to give you adequate additional weekly cash so that you can afford the higher transportation expenses with no having to reduce your spending on anything else. 

True or False, elucidate (using indifference curve analysis): Because of your parents’ generosity, your standard of living, that is, welfare will be unaffected by the increase in gasoline prices.  (HINT: Think of the additional cash from your parents as a “cost-of-living adjustment”.) 

problem2. Using a graph of the compensated and uncompensated demand curves, show how the magnitudes of the CV, EV, and CS will be related to each other when there is a ceteris paribus increase in the price of an inferior good. 

problem3.

a. Usually, there will be a difference between the CV and the EV.  Why? 

b. The change in consumer surplus (CS) is not “theoretically” justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change.  describe how this can be reconciled.

problem4. Use standard indifference curve analysis to show whether the following statement is true or false. 

If the aim of government welfare programs is to offer lower income households with a specific minimum level of economic well-being, then it will be cheaper to do so throughout a system of pure cash transfers than through a system of price subsidies. 

problem5. Carmen, the Queen of Electra, is concerned over what she thinks is an excessive consumption of electricity. Therefore, she proposes an excise tax onto electricity consumption which, if implemented, would add $500 per year to the taxes of the average Electran household. An advisor to the Queen warns of a consumer backlash and recommends the following amendment give the $500 back in the form of a tax rebate.  The Queen thinks this is the dumbest idea she’s ever heard.  She reasons that such a plan would do nothing to reduce electricity consumption because the plan would take away $500 with one hand, but give it back with the other.     

Do you agree with the Queen or not?  Fully elucidate your answer using standard indifference curve analysis.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M91582

Have any Question? 


Related Questions in Macroeconomics

Question 1suppose you are given the following information

Question 1: Suppose you are given the following information about an industry: Q D = 8000 - 100p; Q S SR = 20 + 700p; c(q) = 20 + q 2 /20. where q and c (q) stand for a firm's quantity supplied and cost function; Q SR S ...

Explain why the kinked demand curve model of oligopoly

Explain why the "kinked demand curve" model of oligopoly represents a game theory approach to oligopolistic behavior.

Lab configuring bgp routingobjectivethe overall objective

Lab: Configuring BGP Routing Objective The overall objective of this lab is to configure BGP routing between two routers so that there is a routed BGP network connection between computers in the two LANs. You configure t ...

1 what is opportunity cost and what does it mean2 what are

1. What is opportunity cost and what does it mean? 2. What are the eight guideposts to economic thinking and how to incentives fit into thinking like an economist? 3. What role does scarcity play in economic thought? Doe ...

How are demand deposits treated in m1 as compared to m2a

How are demand deposits treated in M1 as compared to M2? A. They are included in M1 but not M2. B. They are included in M2 but not M1. C. They are included in M1 and M2. D. They are included in neither M1 nor M2.

The bible prohibits usury lev 25 it is one reason the

The Bible prohibits usury (Lev. 25). It is one reason the Catholic Church forbid banking to Christians for 1,000 years. However debt and the paying of interest is very common now. Is borrowing Biblically forbidden? What ...

Easy eco essayspart 3 essays complete any two of the

Easy Eco Essays Part 3 Essays: Complete ANY TWO of the following essays in your own words providing examples and your own opinions not textbook definitions. Each essay should be about one page in length. A. Monetary Poli ...

How can the fed increase the money supply how can the fed

How can the Fed increase the money supply? How can the Fed decrease the money supply? Be specific

The us government has a monopoly on us dollars can money be

The U.S. government has a monopoly on U.S. dollars. Can money be supplied privately? If so what are the risks to the holder?

How would a keynesian economist use fiscal policy to fix a

How would a Keynesian economist use fiscal policy to fix a recession? How would a Keynesian economist use fiscal policy to fix an inflation?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen