answerstohomework3summer2007

answerstohomework3summer2007 - Economics 302 Summer 2007...

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Economics 302 Summer 2007 Answers to Homework #3 Homework will be graded for content as well as neatness. Sloppy or illegible work will not receive full credit. You will find it helpful to do this work using Excel. 1. The total adult population in your country is constant and equal to 500,000 people. In your country there are initially 400,000 people in committed relationships (C) and 100,000 people who are not in committed relationships (F). In this example, “C” stands for committed and F for “free”. There are pros and cons to being in either group and in your country there is substantial movement between these two categories. a. What is the initial percentage of people in committed relationships in this country? Initial percentage of people in committed relationships = (400,000/500,000) (100) = 80%. Now, suppose that each year the rate of commitment to committed relationships , m, is 10% of the previous year’s free population while the rate of separation, s, is 20% of the previous year’s committed population. Use this information to answer the following questions. Note: the adult population in your country is unchanging and should therefore always sum to 500,000. b. Calculate the values for the end of the first year given the values of m and s. You can do this without Excel, but you will find it infinitely easier to do this problem using Excel. Committed Relationships (C) Free from Relationships (F) Total Adult Population Initial Levels at Beginning of Year 400,000 100,000 500,000 Change due to committing to a relationship 10000 -10000 XXX Sub-total 410,000 90,000 500,000 Change due to leaving committed relationship -80000 80000 XXX Total 330,000 170,000 500,000 c. At the end of the first year, what is the percentage of people in committed relationships in this country? 1
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Percentage of people in committed relationships = (330,000/500,000)*100 = 66%. d. Calculate the values for the end of the second year given the values of m and s, and the values you calculated in part (b). Use the following table to report your answers. Committed Relationships (C) Free from Relationships (F) Total Adult Population Initial Levels at Beginning of Year 330,000 170,000 500,000 Change due to committing to a relationship 17000 -17000 XXX Sub-total 347,000 153,000 500,000 Change due to leaving committed relationship -66000 66000 XXX Total 281,000 219,000 500,000 e. At the end of the second year, what is the percentage of people in committed relationships in this country? Percentage of people in committed relationships = (281,000/500,000)*100 = 56.2%. f. Calculate the values for the end of the third year given the values of m and s, and the values you calculated in part (d). Use the following table to report your answers. Committed
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answerstohomework3summer2007 - Economics 302 Summer 2007...

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