Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 13, Problem 7P
To determine
identify the factors that contribute to the changes in the interest rates across consumers
Concept Introduction:
Interest rate: the rate charged per period for borrowed money, deposited or lend expressed as a percentage of principal
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4. Draw a graph with Goods Per Day on the vertical axis and Leisure Hours Per Day
increasing from left to right on the horizontal axis. Show that a person who works can work
fewer hours and increase utility when the wage rate increases.
5. a) The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the
amount spent each year on the "basket" of frult with the quantities shown in column 2?
2003
Items
Qty. 2001
2002
2004
Amount
Amount
Amoun
Price
Amount
Price
Price
Price
t Spent
Spent
Spent
Spent
$0.75
$0.25
$0.70
$0.85
$0.25
$0.90
$0.88
$0.29
$0.95
Apples
10
$0.50
$0.20
$0.5
$2.00
12
2.
Grapes
Raspberries 1
Total
Price Index
Inflation
2.05
2.13
Rate
b) Construct the price index for a "fruit basket" in each year using 2003 as the base year.
c) Compute the inflation rate for fruit prices from 2001 to 2004.
23. Suppose that there are two goods in an economy and that all prices double. At the sametime, the consumer’s income triples, then:(a) The budget line becomes steeper(b) The budget line becomes flatter(c) The budget line does not change(d) The slope of the budget line does not change, but it makes a parallel shift in towardsthe origin(e) The slope of the budget line does not change, but it makes a parallel shift out fromthe origin
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