GROUP HOMEWORK ASSIGNMENT 1

Group 1 Group 2 Group 3 Group 4 Group 5 Group 6

FUNCTIONS
1. Which of the following, 1. Graph the function 1. For the function 1. Economists consider the 1. Graph in one diagram 1. Graph the function
drawn in a rectangular y=2+3 x if the domain y=−x2, if the domain private investment I to the functions (a) 10
plane, respresent a y=2+3 x , (b) y= , assuming that
of the function is the set is the set of all be a function of the x
function? (1) an upward- { x|1≤ x ≤ 4 } nonnegative real interest rate r , so that y=2−3 x, (c) x and y can take
sloping straight line; (2) a numbers, what will its I =f (r ). According to y=3 x +4 . (1) What is positive values only.
parabolic curve with a range be? the definition of a the difference between Next, suppose that both
peak point; (3) a triangle; function, (1) should each (a) and (b)? How do their variables can take
(4) a rectangle. Explain investment figure be graphs reflect it? (2) negative values as well;
shortly. associated with a unique What is the difference how must the graph be
rate of interest? (2) between (a) and (c)? modified to reflect this
Should each rate of How do their graphs change in assumption?
interest determine a reflect it? Show it.
unique investment
figure?

MODEL INGREDIENTS (rewrite the economic model prior to your answer)

2. From economic model 2. From economic model 2. From economic model 2. From economic model 2. From economic model 2. From economic model in
(3.12) on page 41, in Exercise 3.5 no.1, in Exercise 3.5 no.2, (3.23) on page 46, (3.16) on page 42, Exercise 3.4 no.3, specify
specify the constants, specify the constants, specify the constants, specify the constants, specify the constants, the constants, the
the coefficients, the the coefficients, the the coefficients, the the coefficients, the the coefficients, the coefficients, the
exogenous variables, and exogenous variables, and exogenous variables, exogenous variables, and exogenous variables, and exogenous variables, and
the endogenous the endogenous and the endogenous the endogenous the endogenous the endogenous
variables. variables. variables. variables. variables. variables.

SINGLE MARKET EQUILIBRIUM OR DISEQUILIBRIUM (P is always on the vertical axis, for economics concern)
3. Given the market model 3. Given the market model 3. Given the market model 3. Given the market model 3. Given the market model 3. Given the market model
Qd=100−P ; Qd=30−2 P ; Qd=21−3 P ; Qd=100−P ; Qd=100−P ; Qd=30−2 P ;
Qs=2 P−20 , Qs=−5+5 P , Qs=−14+ 4 P, Qs=2 P−20 , Qs=2 P−50 , Qs=−6+4 P ,
¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿
(1) Find P and Q . (1) Find P and Q . (1) Find P and Q . (1) Find P and Q . (1) Find P and Q . (1) Find P and Q .
(2) Draw the model in a (2) Draw the model in a (2) Draw the model in a (2) Draw the model in a (2) Draw the model in a (2) Draw the model in a
diagram and show there diagram and show there diagram and show there diagram and show there diagram and show there diagram and show there
what will happen if price what will happen if price what will happen if price what will happen if price what will happen if price what will happen if price
¿ ¿ ¿ ¿ ¿ ¿
level is lower than P . level is lower than P . level is lower than P . level is higher than P . level is higher than P . level is higher than P .
 GROUP HOMEWORK ASSIGNMENT 1

Group 1 Group 2 Group 3 Group 4 Group 5 Group 6

MARKET AND NATIONAL-INCOME EQUILIBRIUM
4. Given the following 4. Let the national-income 4. Given the following 4. A two-commodity 4. A two-commodity 4. Given the following
national-income model: model be: national-income model: market model is given: market model is given: national-income model:
Y =C + I 0+ G0 Y =C + I 0+ G Y =C + I 0+ G0 Qd 1 =18−3 P1 + P2 Qd 1 =470−5 P 1−2 P2 Y =C + I 0+ G0
C=C 0+ c ( Y −T ) ; C=a+ b ( Y −T 0 ) ; C=a+ b ( Y −T ) ; Q s1 =−2+ 4 P 1 Q s 1=−60+3 P1 C=a+ b ( Y −T ) ;
(0< c< 1) (a> 0,0<b , 1) (a> 0,0<b , 1) Qd 2=12+ P 1−2 P 2 Qd 2=295−P1−3 P2 (a> 0,0<b<1)
T =T 0+ tY ; G=gY ;( 0< g<1) T =tY ; (0<t <1) Qs 2=−2+ 3 P 2 Q s 2=−120+2 P2 T =tY ; (0<t <1)
¿ ¿ ¿ ¿ ¿ ¿
(0< t<1) ¿ ¿
Find Y , C , and G in
¿ Find Y ,C , and T if ¿ ¿
Find Pi and Q i (i=1.2)
¿ ¿
Find Pi and Q i (i=1.2) Find Y , C , and T in
¿ ¿ ¿
Find Y , C , and T if reduced-forms (i.e. the I 0=5,000 ; G0=2,500 ; a=1,000
. ; b=0,2; t=25 % . reduced-forms (i.e. the
C 0=30 ; I 0 =60 , G0=5 ; T 0 =20 ; c=0.75 ; t =20 %
endogenous variable is . endogenous variable is
expressed by the expressed by the
.
system’s parameters). system’s parameters).