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1)You are the chief economic advisor to a small Caribbean country with an aggregate per capita production function of y = 36%

Economics

1)You are the chief economic advisor to a small Caribbean country with an aggregate per capita production function of y = 36%. The savings rate is 6%, and the rate of depreciation is 10%. Population grows at a rate of 4%. There is no technological progress
j. (2) While the Solow model does not directly include any government policies, name one specific government policy that could increase long-run growth in output (income) per capita as described by the Solow model.

2)

Assume that a new test to detect Covid19 has been found. However, the test is not always
right: For people who really do have the Covid19, the test says ?Yes? 80% of the time, P(Yes|Covid19) and for people who do not have the Covid19, the test says ?Yes? 5% of the time, P(Yes|no Covid19). If 2% of the population have Covid19, P(Covid19) and you get a positive test result, what are the chances that you have Covid19?

Group of answer choices

0.246

0.754

0.327

0.85

3)Bridgette has an income of $480 which she uses to purchase only two goods: CDs and mystery novels. The price of a CD, Pcp is $10, and the price of a mystery novel, PMN is $12. Assume all indifference curves have the normal "bowed" shape.
Now return to the situation where Pcp = $10, PMN = $12, and Income = $480. For a membership fee of $120, Bridgette can join a discount shopping club and buy at the lower prices of PcD = $9 and PMN = $6. Will Bridgette take this option? Why or why not? [Hint: With the option, Bridgette's budget constraint will go through 30 CDs and 15 mystery novels, but it will not have the same slope as before.]

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1)Solow Model:

Solow model also called as Swan model used to depict the economic growth of a country and its population by analyzing the changes in the growth rate, capital, technological progress and inputs of labour. It was developed by Robert Solow and this model is considered to be as the basis for modern economics growth.

Why the Solow model does not directly include any Government Policies?

The reason is the Government does not contribute enough resources to capital reserves and production. While . Government spending can be interpreted as infrastructure or other productive services like taxation,inflation, law enforcement, property rights and corruption are important determinants of growth performance. While this Solow model interrelates with the process of economic growth, it can affect the accurate economic performances in the long run or in future providing no growth rate in the per capita income.

Government policy that could increase long-run growth in output(income) per capita as described by Solow model

Solow model has a long-run mathematical model for economic growth by assuming the possibilities of increase in  production, capital, labour sectors, full employment and technology.  In long run the steady state equilibrium states that only increase in technological outcome will result in raise in the growth of the output. Bearing in thoughts those qualifications, possible say that if the economic system is operating efficiently, then in the end the actual yield on long-time period authorities bonds (credit score risk-loose assets) have to be approximately equal, or barely above, the boom rate.

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3)Yes, Bridgette will take this option because a lower price for a good will cause the opportunity set to shift to the right, so that it is tangent to a higher indifference curve representing an increased level of utility. Exactly how much a change in price will lead to the quantity demanded of each good will depend on personal preferences.