Anika Bhuiyan
ECO 134
Instructor: Parisa Shakur ASSIGNMENT 3
Marks:10
INSTRUCTIONS: Answer the following questions on separate pieces of paper Show all workings and make a box around your final answer where needed Attach the cover page on top before submission
1. Presented below are the Demand and Supply functions of two related goods, Good 1 and Good 2. Good 1 82 − 3 Good 2 92 + 2 − 4 − 6 + 32
+
= −5 + 15
a) Are the two goods complements or substitutes. Explain. b) Find the equilibrium price and quantity for which both the markets are at equilibrium 2. Identify each system of equations as consistent, inconsistent or dependent a) -5x - y = -5 y = -5x b) 6x + 2y = 12 y = -3x + 6 c) y = 3/4x + 5 -6x - 8y = 24 3. Y=C+I C=1000+0.8Y I=250 a) Find b) Determine the multiplier, k and interpret the result c) Assume marginal propensity to consume (mpc), b changes to 0.75. Calculate new explain the change.
and
1
ECO 134
Instructor: Parisa Shakur ASSIGNMENT 3
= =65, + = +
Marks:10
4. Y=C+I where
= 70, b=0.6 and a=0.2
a) Find the reduced form of the following income determination model where investment is not autonomous but is a function of income ( in equation form only) b) Find the numerical value of the equilibrium level of income ( c) Show what happens to the multiplier 5. = where + =85, = = = 30, b=0.75, + = = 20 and t=0.2 + )
=
−
a) Find the reduced form of the following income determination model ( in equation form only) b) Find the numerical value of the equilibrium level of income ( ) c) Find the effect on the multiplier if a proportional income tax (t) is incorporated into the model d) Graph the model without the tax as a solid line and the model with the tax as a dashed line
2
Instructor: Parisa Shakur ASSIGNMENT 3
Marks:10
INSTRUCTIONS: Answer the following questions on separate pieces of paper Show all workings and make a box around your final answer where needed Attach the cover page on top before submission
1. Presented below are the Demand and Supply functions of two related goods, Good 1 and Good 2. Good 1 82 − 3 Good 2 92 + 2 − 4 − 6 + 32
+
= −5 + 15
a) Are the two goods complements or substitutes. Explain. b) Find the equilibrium price and quantity for which both the markets are at equilibrium 2. Identify each system of equations as consistent, inconsistent or dependent a) -5x - y = -5 y = -5x b) 6x + 2y = 12 y = -3x + 6 c) y = 3/4x + 5 -6x - 8y = 24 3. Y=C+I C=1000+0.8Y I=250 a) Find b) Determine the multiplier, k and interpret the result c) Assume marginal propensity to consume (mpc), b changes to 0.75. Calculate new explain the change.
and
1
ECO 134
Instructor: Parisa Shakur ASSIGNMENT 3
= =65, + = +
Marks:10
4. Y=C+I where
= 70, b=0.6 and a=0.2
a) Find the reduced form of the following income determination model where investment is not autonomous but is a function of income ( in equation form only) b) Find the numerical value of the equilibrium level of income ( c) Show what happens to the multiplier 5. = where + =85, = = = 30, b=0.75, + = = 20 and t=0.2 + )
=
−
a) Find the reduced form of the following income determination model ( in equation form only) b) Find the numerical value of the equilibrium level of income ( ) c) Find the effect on the multiplier if a proportional income tax (t) is incorporated into the model d) Graph the model without the tax as a solid line and the model with the tax as a dashed line
2