PSU ECON 104 Homework 1

PSU ECON 104 Homework 1 - Points Awarded 95.00 Points...

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Points Awarded 95.00 Points Missed 5.00 Percentage 95.0% 1. Part 1: 20 questions worth 3 points each for a total of 60 points. FOR FILL-IN-THE-BLANK questions: If your answer is in decimal form, round to 2 decimal places. For example, if your answer is .412, enter it into the fill-in-the-blank as .41, or if your answer is 1.415, enter it into the fill-in-the-blank as 1.42. If there are no decimals in your answer, you will simply enter the number; so if your answer is 2, enter 2 with no decimals. Do not enter any extra spaces, do not enter commas or \$ or % symbols. Suppose the consumption function is: C = a 1 Y d + a 2 WRE/S + a 3 CC Where all the a’s (the sensitivity parameters) are greater than zero. Initial conditions: Let a 1 = 0.60, a 2 = 0.04, a 3 = 0.5, WRE/S = 18,000: CC = 90 Solve for C in terms of Y d . Select the correct equation below. A) C = 720 + .60 Y d B) C = 765 + .60 Y d C) C = 765 + .64 Y d D) C = 90 + .60 Y d E) None of the above are correct Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): B 2. Use the equation you found in #1 and let Y d = 2000. C is equal to 1965 . Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 1965 3.

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