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Can Gasoline Become an Exception to the Law of Demand? Can the Law of Supply Be Repealed for the Oil Market? Can the Price System Eliminate Scarcity?

Because we use the envelope theorem in constrained optimisation problems often in the text, proving this theorem in a simple case may help develop some intuition. Thus, sup-pose we wish to maximise a function of two variables and that the value of this function also depends on a parameter, a: f (x1, x2, a). This

Suppose that a consumer’s utility function for goods x, y and z is expressed according to the Cobb–Douglas utility function Prices are given by Consumer income is given by I= 8. a. Determine the utility maximising quantity of good z consumed.b. Explain why this quantity of good z is optimal?c. Determine the minimum income required

A health insurance company considers the risk to a Sherpa who has a current wealth of 20 000 renminbi (RMB), working in the Himalayas, incurring an injury in the performance of their duties which that will cost 10 000 RMB in medical care is 50 per cent. a. Calculate the cost of actuarially fair insurance

GDP is a less-than-perfect measure of the nation’s economic pulse because it a. excludes nonmarket transactions.b. does not measure the quality of goods and services.c. does not report illegal transactions.d. All of the answers above are correct.

Personal income equals disposable income plus a. personal savings.b. transfer payments.c. dividend payments.d. personal taxes.

Adding all incomes earned by households from the sale of resources yields a. intermediate goods.b. indirect business taxes.c. national income.d. personal income.

Subtracting an allowance for depreciation of fixed capital from gross domestic product yields a. real GDP.b. nominal GDP.c. personal income.d. national income.

The GDP chain price index is a. widely reported in the news.b. broadly based.c. adjusted for government spending.d. a measure of changes in consumer prices.

Gross domestic product data that reflect actual prices as they exist in a given year are expressed in terms of a. fixed dollars.b. current dollars.c. constant dollars.d. real dollars.