Consider an economy with a representative household and a representative firm. In thecompetitive equilibrium, when total factor productivity decreases, the marginal rate of substitutionof leisure into consumption _. Choose the correct one.O increasesdecreasesdoesn't changecould either increase or decrease

A decline in total factor productivity (TFP) in the representative agent model under consideration…

Answered: Consider an economy with a…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 1PA

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In a microeconomic model, how would you differentiate between an 'exogenous' variable and an 'endogenous' variable? O Endogenous variables are those determined within the model, while exogenous variables are given from outside the model. O Exogenous variables are those which economists do not study, while endogenous variables are heavily studied. O Exogenous variables are variables that economists cannot measure, while endogenous variables are measurable. Exogenous variables cannot influence endogenous variables in any economic model. O More than one of the above.
Select below the answer that best completes the sentence. When an individual decides to allocate their time between labour and leisure, the opportunity cost of leisure is due to the fact that: O leisure reduces how much time left the individual has for consumption. O every hour of leisure is an hour not earning labour income. O leisure decreases the marginal utility of consumption. O most leisure activities are costly.
Elsa lives alone on an island with two goods, bananas and fresh water. Her utility function is U = 4BW where B is the amount of bananas she consumes and Wthe amount of water. Her production function for bananas is B=Lg where Lg is the amount of labour time she devotes to bananas. Her production function for water is W = Lwwhere Lwis the amount of labour time she devotes to water. If the total time she has available is 70, what should she do to maximize her utility? (Enter your answers in whole numbers.) LB= Lw=[
Consider Justin who makes $1,400 per week and just won a ‘set for life’ lottery ticket whichinvolves a fortnightly payment of $10,000 for 20 years. Currently he works 35 hours per week. Nowdo the following: • Illustrate the effect of the lottery win on Justins budget constraint using a fully labelleddiagram where i) the horizontal axis represents the hours of free time per week, and ii) thevertical axis represents Justins weekly consumption. • Illustrate on the same diagram Justins optimal decisions before and after the lottery winalong with his indifference curves. • Based on your diagram, discuss whether Justin will quit his job.
CEC 201-Microeconomics notes 2020 (Compatibility Mode] Microsoft PowerPoint (Product Activation Fam tions Side Show Review View IA Text Direction |A^|ラ|ミ.m.一青奇 Align Text- AL1令4凸 ALL9 abe AV. Aa-| A.|E喜州 Convert to SmartArt Font Paragraph Cont... • Consumers satisfaction depends only on his incon and leisure • Problem is to max U=u(L,Y) Subject to time constraint Y=w(24-L) Solution Set lagrangian equation Z=u(L,Y) - ^ (Y-w(24-L) • 1st order conditions for maximization requires: o dZ/dL = %3D o DZ/dY = o DZ/d% = %3D • 2nd order conditions for maximization requires • Assignment e Pa f5 f6 ) f7 f8 f9 f10 |米 f11 & 8. 5 7 8. Infinix HOT 10 Y 5
D E B 04 What does point D on this graph represent? O An optimal choice O A choice on the budget constraint O An impossible choice given the income O A choice that would result in income left over
For this question, assume that indifference curves are strictly convex, consumption andleisure are normal goods, and the optimal amounts of consumption, leisure, and labor arealways positive. A wage increase ______. (SE = substitution effect; IE = income effect)(a) increases labor supply via the SE and decreases labor supply via the IE(b) decreases labor supply via the SE and decreases labor supply via the IE(c) increases labor supply via the SE and increases labor supply via the IE(d) decreases labor supply via the SE and increases labor supply via the IE(e) Can’t tell without knowing the utility function
My Moodle My Favou tion 6 An individuals utility function is given by ret rered U = 340x1 + 960x2 + 2x1x2 – 2a- a/2, ed out of when the weekly amount of leisure is x1 132 and earned income is 12 = 760 answer the following: 1. The marginal utility of x1 is ag tion 2. The marginal utility of x2 is 3. Use the small increments formula to estimate the change in the utility when r1 decreases by 1 and x2 increases by 4. The change = 4. Does the law of diminishing marginal utility hold? 5. The MRCS at a given values is Enter non-integer numerical values as decimals to at least 3 decimal places. Note: you must use a. and not , for a decimal point. Next page revious page Mock paper ► - Working from video in SVG Jump to... format
E D C B In the graph above, the shift from curve 'B' to curve 'C' can be attributed to the- O Rising cost of raw materials O Price of a complimentary good decreasing O break-through of new technology O decline in average annual income
. An individual's utility function is given by u = 1000 x, + 450 x. + 5x, x. - 2x-x where x, is the amount of leisure measured in hours per week and x,is income earned measured in cedis per week. Det er mine the value of the marginal utilities, when x, = 138 and x= 500. Hence est imate the change in utility if the individual works for an extra hour, which increa ses earned income by GH¢ 15 per week. Does the law of diminishing ut ility hold for this function? %3D
Sameena works as a free-lance worker at a software house in Rawalpindi. Supposeshe keeps awake for 110 hours a week. Also suppose that part of this time she canspend on earning money doing this job and using it for her consumption, and the restof the time she can spend on her leisure not earning money. At first she earns Rs.550for every hour she works. Draw a figure showing Saima’s budget constraint, herindifference curve for consumption and leisure and her optimum.
] Suppose that a football team is holding tryouts for various positions. A certain playertries out for both offensive line and defensive line. He ends up making the team as an offensivelineman. However, he is actually better at the defensive position. He is puzzled by this so he asksthe coach to explain. What do you think the coach told the player? Relate this to an economicconcept or concepts we have discussed.

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