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ECON2233 Individual Homework 1
(Due on Mar 17 Friday, by 12 noon)
10 points, equivalent to 5% of the unit’s assessments
1. Julio receives utility from consuming pizza (P) and movie (M) as given by the utility
function (,) = √, where P and M denote the amount of pizza and movie
Julio consumed. The marginal utility Julio receives from pizza and movie are given
. The price of pizza and movie are given as = 16
= 8, Julio has an income of $96.
Show the derivation process that leads to the final solution for all parts of question.
a) What is Julio’s optimal bundle of pizza and movies that maximizes his utility?
And draw Julio’s indifference curve and budget constraint in a diagram and
identify the optimal bundle. Please show quantity of movies on x-axis and
quantity of pizzas on y-axis. (2 marks)
b) Holding the price of pizza and Julio’s income unchanged, what’s his new optimal
bundle when price of movie rises to $12? What’s his new optimal bundle if price
of movie falls to $6? Draw his new budget constraints in the previous diagram for
both scenarios and identify the optimal bundles. (2 marks) Derive the demand
curve for movies in a new diagram accordingly. (1 marks)
2. Jim spends most of his time in Coffee Club in Perth. Jim has $24 per week to spend
on coffee and muffins. Coffee Club sells muffins for $4 each and coffee for $2.40 per
cup. He consumes cups of coffee and muffins per week.
a) Draw Jim’s budget constraint and label the axis properly. (1 marks)
b) Now Coffee Club introduces a frequent-buyer card: for every five cups coffee
purchased at the regular price of $2.40 per cup, Jim receives a free sixth cup.
Draw Jim’s new budget constraint. (2 marks)
c) Does the introduction of the frequent-buyer card necessarily encourage Jim to
consume more coffee? Show how your answer depends on Jim’s preference map.
Please typewrite your answers. You should attempt to draw the graphs in MSWord or similar
word processing software. Label your graphs. If you absolutely cannot draw graphs in
software you can draw them by hand, ensure they are very clear, take a photo/scan and insert
them in your MSWord file. Writing all of the assignment by hand and scanning it in is not
appreciated – you should at least type in your non-graph parts of the answers.
Save a copy of your assignment as a backup.
Convert your assignment into a pdf file and upload them in the Assessments > Assessment 2
(home work 1) > Online Short Answer Homework link on LMS. You can submit only once,
so go over your work thoroughly before you pdf it and upload it.
Need Help-Macroeconomics Problems
Intro Macro N. Sheflin
Extra Credit Do any ONE of the following that appeals to you. Write your report as though addressing a clever friend who knew little economics, and use graphical or algebraic analysis as appropriate. Your work should be submitted via the ASSIGNMENT tool in Sakai as a WORD ATTACHMENT. It is due by December 16 9pm– no late submissions will be accepted.
DO NOT CHEAT. Your submission will automatically be checked by TURNITIN for plagiarism and checked against previous semester’s submissions. Be very careful to cite any sources used, use only your own words, not use the work of others without citation. The extra credit can add as much as 2% to your total points, but unless it is perfect, will likely add less. It will be given a 0-100% grade which sakai will convert into a 0-2% addition to your total points. There is no penalty for not doing the extra credit. Note that the final exam is a much more important determinant of your grade in the course so do not allow the extra credit to reduce your study time for the final.
TO GET ANY CREDIT, YOU MUST: INCLUDE and answer THE QUESTIONS I provide (copy and paste any of the following questions right into your report). If you do not include my questions with your answers after each one, you will receive no credit. NOT QUOTE from the book/article or anywhere else – Answer questions in YOUR OWN WORDS ANALYZE the material – you will be graded on your analysis, not your ability to summarize the source. RELATE the reading to what we are studying in this course. NOT write a book reports – ANSWER THE QUESTIONS NOT USE OTHERS WORK OR WORDS WITHOUT CITING THEM – don’t plagiarize (don’t copy and paste from Wikipedia, google searches, etc). Submit a 6-8 ‘typed’, double-spaced document in 11 point font.as a word attachment via Sakai’s ASSIGNMENT tool (not as a pdf)
1. Read Naked Money: A Revealing Look at What it is and Why it Matters, by Charles Wheelan, 2016, W.W. Norton and Company) and select at least one interesting point in each chapter and briefly summarize and relate it to what we have covered this semester. You must number and highlight each point, and then discuss/explain it. Ex: chapter 1 Why Gold is not a good money. As discussed in class, ….
2. Read at least sections I, II, III and V of Alan Blinder’s After the Music Stopped (2013) and explain his answers to the three questions he posed in chapter 1: 1. How Did We Ever Get Into Such A Mess, 2. What was Done and Why, and 3. Did We ‘Waste’ The Crisis?
3. Read “John Maynard Keynes Is the Economist the World Needs Now” http://www.businessweek.com/articles/2014-10-30/why-john-maynard-keyness-theories-can-fix- the-world-economy and a. explain WHY we needed Keynes then/ (financial crisis and great recession) by listing 10 important points made in the article and below each explain in terms of the theories and concepts developed in the course. Be sure to include points made about the recent U.S. and European recession as well as the great depression. i. Ex: 1. Austerity the article refers to austerity which is … Keynes explains this through the paradox of thrift in which …
b. Do we need Keynes NOW, given the state of the economy in 2016?
c. Read the Keynes Biographical sketch http://www.pbs.org/wgbh/commandingheights/shared/minitext/prof_johnmaynardkeynes.html and list and list and i) explain 10 interesting economic and biographical items in discusses. (again, list a point and then discuss it below it). ii) Was Keynes a socialist?
3. Read MAESTRO: Greenspan’s Fed and the American Boom by Bob Woodward, 2000, Touchstone Books. This fast-reading book covers Greenspan’s term at the Fed, up to 2001 and explains the economic events and the workings of the Fed in a non-technical way. Of course it is quite dated now, but good intro to how the Fed works and a quick read. Answer each of the following. a. Select three crises that occurred under Greenspan’s term, summarize the causes, consequences, and role of the Fed in each. b. Why was Greenspan (as Fed Chairman) concerned with such non-Fed issues as: i. the Federal Government Budget Deficit ii. the Bond market iii. the Social Security and Medicaid problems iv. That is, what did these have to do with the Fed? c. In hindsight, what errors did Greenspan make in his term as Chair of the Fed? d. Find 3 interesting personal facts about Greenspan and explain. Also, what is his, somewhat indirect, connection to Rutgers? e. Compare Bernanke’s term with Greenspan’s in terms of challenges and responses (this is not in the book-do some research here) i. What were the major issues of each Chair? ii. What was the basic public persona of each? iii. What was the educational and professional background of each? f. And what about Yellen’s term in comparison so far?
(There is a newer and more comprehensive biography of Greenspan by Mallaby The Man Who Knew but I’m still reading it)
4. Read http://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/ and http://www.economist.com/blogs/graphicdetail/2014/11/secular-stagnation-graphics and https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how- to-respond/ and http://time.com/4269733/secular-stagnation-larry-summers/ and answer the following: a. In what ways has the recovery from the recession been surprising? b. What is secular stagnation according to Summers, and what is the ‘core problem’? c. What evidence is there that we face secular stagnation? d. What are some of the alternative explanations of the issues, (liquidity trap, savings glut, etc).? e. What role do interest rates play in secular stagnation f. How does the ‘fourth industrial revolution / new economy” enter into secular stagnation? g. What does Summers’ see as the ‘cure’ h. What are some of the international policy implications of secular stagnation according to Summers? i. What are some political implications?
5. Read Burton Malkiel’s A Random Walk Down Wall Street (2016, W W Norton & Co;). Do the following, based on reading at least chapters 1-10 and 15 with the stress on part II. a. Why is the book titled “A Random Walk …”? b. Why are (some) markets efficient and why do stocks follow a random walk?
c. Explain why you can’t beat the market, according to Malkiel? d. What are the arguments/ evidence against efficient market theory? In favor? e. What are the implications for your personal investing of efficient markets hypothesis? f. What did the speculative episodes described in chapter 2 have in common? g. Define and defend Fundamental Analysis and explain why it doesn’t work. h. Explain and critique Technical Analysis and explain why it is widely used in light of your critique i. What are the main investment lessons of behavioral economics/finance – list and very briefly explain? j. Find 4 examples from recent news articles dealing with issues raised by Malkiel, cite and comment upon them. (copy and paste the headlines and briefly comment) k. What does Malkiel feel about the bubbles of the 2000s? l. How does Malkiel suggest you invest once you start working?
Purchase Answers-Principles of Macroeconomics.
Principles of Macroeconomics. DATA EXERCISE #2 INSTRUCTION
DATA EXERCISE #2
Format of the Project:
The Data Exercise Attachments are limited to a maximum two files in doc, docx., xls. xlsx., or rtf. formats. OTHER FORMATS ARE NOT ACCEPTABLE.
Please note that hand-written and scanned works, pdf. files, jpg. files, as well as files posted in google drive, will not be accepted .
The paper should be written in APA style Research Paper format.
Please note that Use of APA Citation Methodology is required for all parts of the assignment
Data exercise #2 Consists of three parts
Part 1: The Unemployment Rate (weight 30% of the assignment grade)
Complete the following exercise
Visit the Bureau of Labor Statistics Web Site,
www.bls.gov/news.release/empsit.toc.htm . Select Employment Situation Summary.
Write a report (1-2 pages double – spaced) to answer the questions:
- What month (and year) is summarized? What was the unemployment rate for that month? How does that rate compare with the rate in the previous month?
- What were the unemployment rates for adult women, teenagers, blacks, Hispanics, and whites? How did these rates compare with those a month earlier?
- What factors make it difficult to determine the unemployment rate?
- Why is unemployment an economic problem?
- What are the non-economic effects of unemployment?
- Who loses from unemployment?
Part 2: The Inflation Rate (weight 30% of the assignment grade)
Complete the following exercise:
Visit the Bureau of Labor Statistics Web Site,
www.bls.gov/news.release/cpi.toc.htm . Select Consumer Price Index Summary.
Write a report (1-2 pages double – spaced) to answer the questions:
- What month (and year) is summarized? What was CPI-U for that month?
- What was the rate of inflation (percentage change in the CPI-U) for the month? How does that rate of inflation compare with the rate in the previous month?
- Which two categories of goods or services had the greatest price increase for the month?
- Which two categories of goods or services had the lowest price increase (or greatest price decrease) for the month?
- Who loses from inflation?
- Who benefits from inflation?
Part 3: Unemployment Data by Labor Force Groups and Duration (40% of the project grade)
Go to https://www.whitehouse.gov/administration/eop/cea/economic-report-of-the-President/2016
– the home page of the Economic Report of the President.
Scroll down and Click on the link download as pdf.
This link is located below Appendix B: Statistical Tables Relating to Income, Employment, and Production.
- Find unemployment data (Table B–12.—Civilian unemployment rate) for the following four years 1995, 2000, 2005, and the last available year. Use four labor force groups: males, and females, in each case 16 to 19 years of age, versus 20 years of age or over. Present the result in your project as a table.
- Use the Economic Report of the President (Table B–13.—Unemployment by duration and reason) to find data on the duration of unemployment in 1995, 2000, 2005, and the last available year. Present the result in your project as a table.
Write a report (1-2 pages double-spaced) about the results you received.
In this paper consider, but do not be limited to the following:
- Compare the distribution of unemployment by duration over these years. What relationship, if any, do you find?
- Starting in the early 1990s many U.S. firms downsized their operations. In your opinion, how did this affect the duration of unemployment?
- Demographic studies show that the proportion of teenagers and minorities in the U.S. population is likely to increase in the near future. In your opinion, what implications, if any, will this trend have on the unemployment rate?
WRITING GUIDELINE for the Data Exercise #2
DATA EXERCISE #2
Part 1: The Unemployment Rate.
Must be thorough in development and articulation in presenting and analyzing the data in the unemployment rate.
Part 2: The Inflation Rate.
Must be thorough in development and articulation in presenting and analyzing the data in for the inflation rate.
Part 3: Unemployment Data by Labor Force Groups and Duration. Must be very thorough in development and articulation in presenting and analyzing the data Unemployment Data by Labor Force Groups and Duration
Purchase Answers-Principles of Macroeconomics.
Suppose we have an economy with three individuals, each with the following utility functions and budget constraints:
Person 1: u(X1, X2) = X10.25 * X20.75 subject to 4X1 + 2X2 = 50
Person 2: u(X1, X2) = X10.5 * X20.5 subject to 4X1 + 2X2 = 75
Person 3: u(X1, X2) = X10.75 * X20.25 subject to 4X1 + 2X2 = 100
- For each individual, graphically depict the utility maximizing allocation of X1 and X2.
- What is the total social welfare in this economy using a Utilitarian social welfare function?
Who is the worst-off person in this society?
- Suppose the government wants to increase social welfare and taxes the most well-off person $25 and redistributes that income to the worst-off person.
- Depict how the utility maximizing decision changes for each person in the economy under this scenario.
- Discuss the relative magnitudes of the income and/or substitution effects due to the policy.
iii. How has social welfare changed as a result of the policy?
Essay, Macro & Micro economics
What is going on in the economy and how will this effect our business
in our state of Ohio? What should be done to correct the current
situation if anything?
Please follow the instructions of the attached file. Also, please use
the sources in the attached file(DO NOT USE different sources).
Your turn to show you can do economic analysis.
You are an economist and are asked to comment on the following.
Mr./Ms. Economist, What is going on in the economy and how will this effect our business in our state of Ohio? What should be done to correct the current situation if anything?
Follow the following steps:
(1) Learning Objectives
- Practice and experience in reflecting on a topic in the current economy.
- Practice in analysis of economic trends.
- Gaining of confidence about talking about the economy.
- Ability to know and use the resources of economic commentary, prior analysis and data.
(2) Background on the problem at hand – lots to read first.
My aunt, who is very savvy, claims a depression is approaching. We have experienced a deep recession with a long recovery, but what does the future portend? Is this country back on track or still well below the mark?
One thing is certain, the immediate economic future is uncertain.
Your job is to write an essay on a proposition below about the current state of the economy and what it portrays for the future of business in Ohio.
First some definitions
What is a business cycle and what is a recession?
A business cycle is a mapping over time of the health of the economy, whether the economy is in recession, growing in an expansion, at a peak or contracting.
What is the difference between recession and depression?
Here is an article about the Great Depression from the CEE.
Here is an article on Business Cycles written by Christine Romer from the CEE. (Who served in the the administration of President Obama?)
Some data sources for the United States can be found at the following. You will have to find Ohio data on your own.
Economic Indicators (for the US) main page http://www.gpoaccess.gov/indicators/index.html
Economic Report of the President
Bureau of Labor Statistics Economy at a Glance
*updated* The last link used to be much easier to use and I am adding the next as a helpful data link. You will be able to use and customize graphs if you want at FRED. –
Economic Data – FRED (Federal Reserve Bank of St. Louis)
OK now that you have reviewed all of the above links… you have haven’t you? If not go back and do that now.
Now that you have reviewed / read all of the above links, the following is the Official National Bureau of Economic Research latest statement on the economy. http://www.nber.org/cycles/ Below is part of that statement and the rest of that webpage may be of interest to you as well.
CAMBRIDGE September 20, 2010 – The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.
In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.
The committee also maintains a quarterly chronology of business cycle peak and trough dates. The committee determined that the trough occurred in the second quarter of 2009, when the average of quarterly real GDP and GDI reached its low point.
(3) The requirements of the homework set or how to complete this Assignment
In this exercise you will be put to the ultimate test… telling your employer what is really happening. After all, you are the in-house economist, you must know. Only you know that is a difficult task to know, but what mixture of analysis and opinion can you render in writing for your employer?
The requirements are two: answer the question posed below to the best of your ability and prepare a report for your employer. As with all employers, they do not have time to read long diatribes, so prepare an executive summary and attach supporting arguments after the summary. A good guide is the NBER announcement which contains a few paragraphs followed by a question and answer section, but the ultimate form is up to you.
You must include links to all sources used as references and support for your arguments.
(4) Grading: Your paper will be graded according to the following criteria – so make sure your essay conforms.
|Level of Achievement||General Presentation||Reasoning, Argumentation|
(5) A statement of the question you are to discuss.
Important: You must write on the following. You must lead to a conclusion or recommendation. Your recommendation must be based on relevant data for both the US and Ohio and if available your employer. (Not employed? Then write as if you are and identify the type of business.)
Be sure to anticipate the other side’s criticism and answer that expected criticism.
Proposition: Mr./Ms. Economist, What is going on in the economy and how will this effect our business in our state of Ohio? What should be done to correct the current situation if anything?