Cindy takes a summer job and earns an after-tax income of $5,000. Her living expenses during the summer were $1,000. What was Cindy's saving during the summer and the change, if any, in her wealth? >>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. Cindy's saving during the summer is S[

Cindy takes a summer job and earns an after-tax income of $5,000. Her living expenses during the summer were $1,000. What was Cindy's saving during the summer and the change, if any, in her wealth? >>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. Cindy's saving during the summer is S[

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(a) Suppose real GDP per person falls during a devastating recession, which in turn causes consumption to fall by 5%. Suppose there are no taxes in this economy. Would giving everyone 5% more income during the recession cause consumption to go up 5%? (b) An individual gets a salary increase from £50,000 to £75,000 per year. The individual saved £10,000 a year before the salary increase and £20,000 a year after the salary increase. Assume there are no taxes, the individual does not borrow, and the individual does not withdraw their savings. Calculate the individual's marginal propensity to consume.
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Economics Which of the following situations represent saving? a) Mike borrows $8,000 from a bank and buys a truck for his personal use. b) John uses his $500 paycheck to buy stock in Microsoft. c) Austin borrows $9,000 from a bank to buy a truck to use in his lawn mowing business. d) Your roommate earns $2000 and spends it
Economics,
Scenario 1: Individual Retirement Accounts (IRAs) allow workers to shelter a portion of their income from taxation. Suppose the maximum annual contribution to accounts of this type is $6,000 per person. Now suppose there is an increase in the maximum contribution, from $6,000 to $9,000 per year. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds tofall and the level of investment spending toincrease . Scenario 2: An investment tax credit effectively lowers the tax bill of any firm that purchases new capital within some relevant time period. Suppose the government implements a new investment tax credit. Shift the appropriate curve on the graph to reflect this change. The implementation of the new tax credit causes the interest rate tofall and the level of saving tofall . Scenario 3: Initially, the government's budget is balanced; then…
Suppose that y =100 (income today) • y' = 150 (income tomorrow) 10% (interest rate on bonds) %3D r = • t = 10 (taxes today) • t' = 10 (taxes tomorrow) Suppose that c = 100. Is the consumer borrowing or saving, today? And what will her budget constraint look tomorrow? The consumer is borrowing. Her budget constraint tomorrow will be c' = 150 -10 - 10*(1.1) = 129 The consumer is saving. Her budget constraint tomorrow will be c' = 150 -10 + 10*(1.1) = 151 O The consumer is neither borrowing nor saving - she is breaking even. Her budget constraint tomorrow will be c' = 150 -10 = 140 O The consumer is saving. Her budget constraint tomorrow will be c' = 150 + 10*(1.1) = 161 %D
Suppose you bought a condo for $100,000 financing it with a $20,000 down payment of your own funds and an $80,000 mortgage loan from a bank. Now, instead of (a) or (b), suppose the value of the condo fell from $100,000 to $70,000. Assuming you paid $100,000, financing it with $20,000 of your own money and $80,000 with a mortgage loan, and ignoring interest and other costs, calculate your rate of return on your asset (ROA) and your rate of return on equity (ROE). What is the value of your equity stake in the condo after the price fall?
4. A company introduced a new product to the market in the first month of the year which was supported by the corresponding advertising campaign and showed steady growth in the following months. The initial price was set at a level of 30% above average cost (MK). The company's goal is to cover its overheads and achieve maximization in profits and that's why I'm wondering if the price of €7,5 is optimal. With the continuous growth of sales, the company conducted market research and found that the elasticity of demand towards the price is -3. The formula for calculating the demand elasticity to the price is given: ε T = [-MK/(T-MK)] - 1 Sales (tons) and cost (mm. (EUR) For the next 3 months they are estimated as follows: JANUARY FEBRUARY MARCH Sales (volume) 2.250 2.500 2.750 Raw materials €1.400 €1.550 €1.700 Work €3.350 €4.050 €4.950 Other industrial costs €3.000 €3.075 €3.150 Administrative expenses €2.150 €2.150…
U(C1, C2) = c₁0.8 20.4 where c₁ is the quantity of current consumption goods and c₂ is the quantity of future consumption goods. Consider a consumer whose income is y₁ = 100 in the current period and y₂ = 140 in the future period. The consumer pays lump-sum taxes t₁ and t₂ == = 20 in the current period 10 in the future period. The real interest rate is r = 0.1, or 10%, per period. (a) Write down the consumer's budget constraint for each period and derive the consumer's lifetime budget constraint. What is the value of the consumer's lifetime wealth? [Note: Lifetime wealth is the present value of the consumer's lifetime disposable income] (b) Draw the lifetime budget line on the (C1, C2) plane with c₁ on the horizontal axis and C₂ on the vertical axis. Include the values of the intercepts and the endowment point in your graph. What is the slope of the budget line? (c) What are the two conditions that the consumer's optimal choice of (C1, C2) must satisfy? Find the consumer's optimal…
Harper is a short-lived human who only lives for two years: current year and next year. In the current year, Harper has an income of $189 and has to pay $36 in taxes. Harper expects that he can receive an income of $132 and has to pay $27 in taxes next year before he dies. The real interest rate between current and next year is 7%. What is Harper's lifetime wealth (in $)? Round your answer to at least 2 decimal places