{"id":35146,"date":"2022-02-22T13:12:37","date_gmt":"2022-02-22T13:12:37","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/?p=35146"},"modified":"2022-02-22T13:12:37","modified_gmt":"2022-02-22T13:12:37","slug":"economics-questions-2","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/economics-questions-2\/","title":{"rendered":"Economics Questions"},"content":{"rendered":"<p>Assignment 3 Econ 3030 Year 2022<br \/>\n1. Consider the following demand functions, which are the result of<br \/>\nmaximizing utility where the person\u2019s preferences can be represented by a<br \/>\nCobb-Douglas function.<br \/>\n\ud835\udc65\ud835\udc651 = 2<br \/>\n3<br \/>\n\ud835\udc35\ud835\udc35\/\ud835\udc43\ud835\udc431 \ud835\udc65\ud835\udc652 = 1<br \/>\n3<br \/>\n\ud835\udc35\ud835\udc35\/\ud835\udc43\ud835\udc432<br \/>\na) Use logarithms to show that the demand elasticity (price elasticity of<br \/>\ndemand) is equal to 1 for both \ud835\udc65\ud835\udc651 \ud835\udc4e\ud835\udc4e\ud835\udc4e\ud835\udc4e\ud835\udc4e\ud835\udc4e \ud835\udc65\ud835\udc652.<br \/>\nb) Use logarithms to show that the income elasticity is equal to 1 for both<br \/>\n\ud835\udc65\ud835\udc651 \ud835\udc4e\ud835\udc4e\ud835\udc4e\ud835\udc4e\ud835\udc4e\ud835\udc4e \ud835\udc65\ud835\udc652.<br \/>\nc) What is the cross-price elasticity of good 1 with respect to the price of<br \/>\ngood 2?<br \/>\n2. Consider the function \ud835\udc44\ud835\udc44 = \ud835\udc3e\ud835\udc3e0.4\ud835\udc3f\ud835\udc3f0.7, where each variable is a function of<br \/>\ntime.<br \/>\na) Write this in log form.<br \/>\nb) if capital grows at 2% per year and labour grows at 1% per year, what is<br \/>\nthe growth rate of Q?<br \/>\n3. Exports, X, are growing at 6%. Imports, M, are growing 7%. At time 0,<br \/>\nexports are 700 and imports are 800.<br \/>\na) Calculate the growth rate of net exports, NX, where<br \/>\nNX = X \u2013 M<br \/>\nb) Interpret your result. What does the number you found mean?<br \/>\n4. Challenge level: (though actually very quick)<br \/>\nThe elasticity of substitution is defined as percentage change in relative<br \/>\nquantities resulting from a percentage change in the (inverse) relative<br \/>\nprices, or the percent change in \ud835\udc65\ud835\udc651<br \/>\n\ud835\udc65\ud835\udc652<br \/>\nresulting from a percent change in the<br \/>\nrelative price line \ud835\udc5d\ud835\udc5d1\/\ud835\udc5d\ud835\udc5d2.<br \/>\nConsider the ratio of first order conditions for a Cobb-Douglas utility<br \/>\noptimization problem:<br \/>\n\ud835\udc65\ud835\udc652<br \/>\n\ud835\udc65\ud835\udc651<br \/>\n= 1<br \/>\n4<br \/>\n\ud835\udc5d\ud835\udc5d1<br \/>\n\ud835\udc5d\ud835\udc5d2<br \/>\nDerive the elasticity of substitution for this case.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Assignment 3 Econ 3030 Year 2022 1. Consider the following demand functions, which are the result of maximizing utility where the person\u2019s preferences can be represented by a Cobb-Douglas function. \ud835\udc65\ud835\udc651 = 2 3 \ud835\udc35\ud835\udc35\/\ud835\udc43\ud835\udc431 \ud835\udc65\ud835\udc652 = 1 3 \ud835\udc35\ud835\udc35\/\ud835\udc43\ud835\udc432 a) Use logarithms to show that the demand elasticity (price elasticity of demand) is equal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-35146","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/35146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=35146"}],"version-history":[{"count":3,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/35146\/revisions"}],"predecessor-version":[{"id":35149,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/35146\/revisions\/35149"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=35146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=35146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=35146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}