B. In the Crescent City urbanized area, all households have the same tastes, but some households are richer and some are poorer. Richer households eam $100,000 per year and poor households eam $50,000 per year. Amenities and public services are the same everywhere in the urbanized area. There is one commuter per household and all commuters work downtown. A reliable research study of commuting behavior shows that richer households value their commuting time at $20 per hour and poorer households value their time at $10 per hour. What is the income elasticity of the value of commuting time? There are two housing bid-rent curves that cross at the distance x". At x* rich households consume 4000 sq. feet of housing, and poor households consume 1000 sq. feet. a. What is the income elasticity for the value of commuting time in Crescent City?

B. In the Crescent City urbanized area, all households have the same tastes, but some households are richer and some are poorer. Richer households eam $100,000 per year and poor households eam $50,000 per year. Amenities and public services are the same everywhere in the urbanized area. There is one commuter per household and all commuters work downtown. A reliable research study of commuting behavior shows that richer households value their commuting time at $20 per hour and poorer households value their time at $10 per hour. What is the income elasticity of the value of commuting time? There are two housing bid-rent curves that cross at the distance x". At x* rich households consume 4000 sq. feet of housing, and poor households consume 1000 sq. feet. a. What is the income elasticity for the value of commuting time in Crescent City?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Terry attends college and works part-time in a drug store. She can work up to 40 hours per week and is paid $9 per hour. With her schoolwork and other responsibilities, she only has 40 hours per week total to devote to work and leisure. The following table shows her utility from different levels of leisure and income. Hours of Leisure Total Utility from Leisure Marginal Utility of Leisure Work Hours Income Total Utility from Income Marginal Utility from Income 5 18 5 45 35 10 34 10 90 59 15 48 15 135 77 20 56 20 180 86 25 60 25 225 92 30 65 30 270 98 35 69 35 315 103 40 72 40 360 107 Terry decides to decrease her work hours from 20 to 10. What will be her total utility from both leisure and income when working 10 hours per week?
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Using money creation to pay for government spending
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