tutorial_4 - ECOS 2001 Tutorial 4 1. Decide whether each of...

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ECOS2001 Tutorial 4 1 ECOS 2001 Tutorial 4 1. Decide whether each of the following statements is true or false. (a) “If the agent is a saver and the interest rate declines, if the agent continues to save the change in her welfare is ambiguous.” (b) “If an agent is a borrower and the interest rate falls, he will not become a saver.” 2. In Gas Pump there are two types of consumers, Buick owners and Dodge owners. Every Buick owner has a demand for petrol 20 5 B Dp =− for p 4 and D B (p) = 0 for p > 4. Every Dodge owner has a demand function D D (p) = 15 – 3p for p 5 and D D (p) = 0 for p > 5. (Quantities are measured in litres and price is measured in dollars.) Suppose that Gas Pump has 100 Buick owners and 50 Dodge owners. (a) If the price is $3, what is the total amount demanded by each individual Buick owner? And by each Dodge owner? (b) What is the total amount demanded by all Buick owners? What is the total amount demanded by all Dodge owners?
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tutorial_4 - ECOS 2001 Tutorial 4 1. Decide whether each of...

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