Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 1.A, Problem 5AP
To determine
Construct the equation and predict the savings.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The relationships between some economic variables w, y, and z and another economic variable, x, are shown in the graph above. Notice that the horizontal axis is labeled “x” since they are all functions of x but the vertical axis is not labeled. 1-1 Does the vertical axis need a label in order for you to be able to understand the graph?1-2What value of x minimizes w?
Suppose that when the interest rate on loans is 16 percent, businesses find it unprofitable to invest in machinery and equipment. However, when the interest rate is 14 percent, $5 billion worth of investment is profitable. At 12 percent interest, a total of $10 billion of investment is profitable. Similarly, total investment increases by $5 billion for each successive 2-percentagepoint decline in the interest rate. Describe the relevant relationship between the interest rate and investment in a table, on a graph, and as an equation. Put the interest rate on the vertical axis and investment on the horizontal axis. In your equation use the form i = a + bI, where i is the interest rate, a is the vertical intercept, b is the slope of the line (which is negative),and I is the level of investment.
Sketch a graph to illustrate your idea of each of the following relationships. Be sure to label both axes appropriately. In each case, explain under what circumstances, if any, the curve could shift:
The relationship between a person’s age and height
Average monthly temperature over the course of a year
A person’s income and the number of hamburgers consumed per month
The amount of fertilizer added to an acre of land and the amount of corn grown on that land in one growing season
An automobile's horsepower and it's gasoline mileage (in miles per gallon)
Chapter 1 Solutions
Microeconomics
Ch. 1.2 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.2 - Prob. 3QQCh. 1.2 - Prob. 4QQCh. 1.A - Prob. 1ADQCh. 1.A - Prob. 2ADQCh. 1.A - Prob. 3ADQCh. 1.A - Prob. 1ARQCh. 1.A - Prob. 2ARQCh. 1.A - Prob. 1AP
Ch. 1.A - Prob. 2APCh. 1.A - Prob. 3APCh. 1.A - Prob. 4APCh. 1.A - Prob. 5APCh. 1.A - Prob. 6APCh. 1.A - Prob. 7APCh. 1.A - Prob. 8APCh. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8P
Knowledge Booster
Similar questions
- The following table contains data on the relationship between saving and income. Rearrange these data into a meaningful order and graph them on the accompanying grid. What is the slope of the line? The vertical intercept? Interpret the meaning of both the slope and the intercept. Write the equation that represents this line. What would you predict saving to be at the $12,500 level of income?arrow_forwardIf your income is $60 and the prices of product A and product B are $4 and $3, respectively, how many units of product B can you purchase when all your income will be used to purchase product B only? Use a number, no decimal value, no commas, no space, no unit of measurement. * Your answer If your income is $60 and the prices of product A and product B are $4 and $3, respectively, what would be the function of the budget line, when product A is assigned on the Y axis? * O Qb = 20 - 1.33 Qa O Qa = 15 - 0.75 Qb O Qb = 15 - 1.33 Qa %3D Qa = 20 - 0.75 Qbarrow_forwardNicolas Cage, an award winning and prolific actor, once had a net worth of about $150 million (he earned $40 million in 2009 alone!). By 2011, he was having to sell off much of his amassed collection of homes, cars, and novelties to pay off remaining debts and had a net worth of about $25 million. Ever wonder why he's in a new action movie on Netflix every other month? a. Move the point on the graph to represent the consumption decisions of Nicolas Cage in 2009 after he earned $40 million. Marginal Benefit Consumptionarrow_forward
- The variable shown on the vertical axis is _________ . The units for the variable on the horizontal axis are __________ . There are two ways to view the information presented on the graph. First, the graph tells us the amount a person with a certain income is likely to spend on a car, and second, it tells us the probable income of a person who spent a certain amount on a car. For example, if an individual earned $40,000 last year and purchased a new car, you would expect that person to have paid about _________ for the car. Similarly, if someone just paid $25,000 for a car, you could use this graph to estimate that this person's income was probably around __________ .arrow_forwardThe following table contains data on the relationship between saving and income. Rearrange these data into a meaningful order and graph them on the accompanying grid. What is the slope of the line? Interpret the meaning of the slope. What would you predict saving to be at the $12,500 level of income?arrow_forwardOn September 28, 2012. The Wall Street Journal reported that in the second quarter, the number of cellphone subscribers on contract plans rose just 0.7% from the year before, to 219 million, according to UBS AG. The number of prepaid customers grew about 11.7% to 71 million. How many prepaid customers were there in the second quarter of 2011?arrow_forward
- Old Macdonald has a farm. He works 80 hours a week. He can either grow rhubarb or raise chickens. Every hour that he spends growing rhubarb gives him £2 of income this year. Every hour that he spends raising chickens this year will add £4 to his income next year. In fact, next year's weekly income will be 100 + 4H pounds where H is the number of hours he spends raising chickens this year. Old Macdonald's utility function is U(c1, c2) = min{c1, c2} , where ci and c2 are his consumption expenditures this year and next year. Old Macdonald doesn't believe in banks and will neither lend money nor borrow money. i. Explain how Old Macdonald budget line for current and future consumption would look like, identifying key points on it. ii. How many hours a week will he choose to spend raising chickens? How much money will he spend per week on consumption in each year? iii.arrow_forward3. Finally, think about the following applied situation: An economist wants to estimate a line that relates personal consumption C and disposable income I. The economist interviews a few households and obtains the following data: Income Consumption (thousands of dollars) (thousands of dollars) 20 18 18 13 27 21 36 27 37 26 45 36 50 39 c) What is the interpretation of the rate of change? Clearly state the units for the slope and write a sentence explaining what the rate of change tells us in this case.arrow_forwardThe following graph contains four lines (A, B, C and D), each of which has a slope that is either positive, negative, zero, or infinite. For each of the following scenarios, indicate whether the relationship between the two variables is positive or negative, as well as which line on the previous graph has a slope that reflects this type of relationship. Hint: The X-axis and Y-axis on the graph are not labeled intentionally. You need to substitute the variables from each scenario for the horizontal and vertical axis. For example, in the first scenario, X-axis should be labeled “ The average grade received" and Y-axis should be labeled "The number of hours spent studying". Scenario: As the number of hours spent studying rises, the average grade received rises. Relationship: Positive or Negative Line: A, B, C, or D? Scenario: As the number of hours spent watching TV rises, the average grade received falls. Relationship: Positive or Negative Line: A, B, C, or D? Scenario: As the…arrow_forward
- Rajiv is buying pizza and salad for a company lunch. Suppose that a slice of pizza costs $2.00, and a bowl of salad costs $4.00. Let E be the amount in dollars that Rajiv spends on pizza and salad. If Rajiv buys P slices of pizza and S bowls of salad, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that S is written in terms of E and P. The quantity of salad he buys can be represented by the equation Suppose Rajiv has $32.00 to spend on pizza and salad; that is, E = $32.00. Complete the following table with the values of P or S that make the equation true. Hint: To complete the first row, determine the number of salad bowls Rajiv can purchase with $32.00, when the number of pizza slices he purchases is 0. Budget Pizza Salad (Dollars) (Slices) (Bowls) 32.00 32.00 8 32.00 Use the black line (plus symbols) to plot the line illustrating the combinations of pizza and salad that Rajiv can purchase with a budget of…arrow_forward7. Dependent & independent variables; positive & inverse relationships: Ypsilanti Market Research conducted a survey to find out whether people who earn more money purchase more expensive goods. The following table indicates the relationship between income the survey subjects earned and the price of the car that they purchased. Price Income (Thousands of dollars per car) (Thousands of dollars per year) 0. 10 20 15 40 20 60 25 80 30 100 In the diagram below, draw the graph corresponding to the above table.arrow_forwardRandolph is taking three courses this semester: economics, statistics, and finance. He has decided to spend 20 hours per week studying (in addition to attending all his classes) and his objective is to maximize his average grade, which means maximizing the total of his grades in the three courses. The table shows Randolph's estimate of the relation between time spend studying and his grade for each course. Hours of study 4 5 6 7 8 9 10 Grade in: Economics Statistics 63 54 64 72 79 Multiple Choice 85 88 90 92 72 78 83 87 89 Finance 68 76 82 87 90 93 95 Based on the information in the table, how should Randolph allocate his time? 7 hours economics, 7 hours statistics, 6 hours finance 6 hours economics, 6 hours statistics, 8 hours financearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education