Exam 14: Capital and Time

Draw a two period budget line where the borrow/lending rate of interest,r,allows consumers to choose consumption in each of the two periods.C1 and C2 given their anticipated income on two periods,Y1 and Y2.The vertical (C2)intercept is

Accelerated depreciation laws may increase firms' investment in equipment because

Draw a two period budget line where the borrow/lending rate of interest,r,allows consumers to choose consumption in each of the two periods.C₁ and C₂ given their anticipated income on two periods,Y₁ and Y₂.The slope is

Draw a two period budget line where the borrow/lending rate of interest,r,allows consumers to choose consumption in each of the two periods.C1 and C2 given their anticipated income on two periods,Y1 and Y2.The one point on the budget line not affected by the interest rate is

An increase in the corporate profits tax will most likely lead to

Suppose a person's preferences are to "consumption smooth",which means they wish to get $C _ { 1 } = C _ { 2 }$ for all incomes and interest rates $Y _ { 1 } = Y _ { 2 }$ .For any interest rate and ,the person will ____ in the first period.

If real extraction costs do not change,the relative price of a finite resource would be expected to

Suppose Johnny Stroller sells 12,25,and 75 year-old scotch in under black,red,and blue labels.Suppose the storage costs are zero and the initial production costs are the same.What is the implied (approximate)interest rate if black sells for $12,red for $16 and blue for $44.

The two-period budget line for incomes Y1 and Y2 and consumption C1 and C2 can be written as $C _ { 2 } = Y _ { 1 } ( 1 + r ) + Y _ { 2 } - ( 1 + r ) C _ { 1 }$ ,if the interest rate were to rise the budget line would

Draw a two period budget line where the borrow/lending rate of interest,r,allows consumers to choose consumption in each of the two periods.C1 and C2 given their anticipated income on two periods,Y1 and Y2.The horizontal (C1)intercept is