Economics

posted by .

Assume that the average income of an artist is $40,000 per year and that C=0.75Y^P. Further assume that in a good year the artist earns $50,000 and that in a bad year she earns $30,000.
1)Calculate the artist's average propensity to consume on average, in a good year and in a bad year respectively.

2)Calculate the artist's transitory income in an average year, in a good year and in a bad year respectively.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Intro Finance

    Not sure how to solve: Two Questions: (1)Cindy has income of $12000 in year 0. Calculate her income in year 1 if she wants to consume $26,000 in year 0 and $14,000 in year 1. Assume the interest rate is 4% per year. (2)Jonathan has …
  2. precalc

    Assume that this year, n = 1, the average annual salary for women in the United States is $25,000 and that it is increasing by 5% per year, meaning that each year the salary is 1.05 times what it was the previous year. Assume that …
  3. Fin 324

    Income and retained earnings relationships: Assume that retained earnings increased by $375,000 from December 31, 2008 to December 31, 2009, for jarvie Distribution Corporation. During the year, a cash dividend of $135,000 was paid. …
  4. math

    vickie earns $20,000 a year as a bookkeeper. if she receives a raise of 2%, how could her new total salary be represented?
  5. math

    vickie earns $20,000 a year as a bookkeeper.if she receive a raise of 2%,how could her new total alary be represented?
  6. math

    vickie earns $20,000 a year as a bookkeeper.if she receive a raise of 2%,how could her new total salary be represented?
  7. statistics

    Suppose that you are evaluating two different alternatives. The inflated cost stream for alternative A is $8,000 for year 1, $9,000 for year 2, $12,000 for year 3, 12,000 for year 4, and $13,000 for year 5. The inflated cost stream …
  8. Finance

    Cindy has an income of 56,000 in year 0. Calculate her income in year 1 if she wants to consume 40,000 in year 0 and 27,000 in year 1. Assume that the interest rate is 1.5 % per year.
  9. Probability

    A survey of 1,200 men and women asked, "Do you earn over $75,000 per year?
  10. Personal Finance

    Assume that you are 23 years old and that you place $3,000 year-end deposits each year into a stock index fund that earns an average of 9.5% per year for the next 17 years. how much money will be in the account at the end of 17 years.

More Similar Questions