economics paper31 discussion

[biseshbhattarai]

again its question no.20 plz help yaar!! http://www.xtremepapers.me/CIE/index.ph ... _qp_31.pdf

 

[djdead1]

ohh i see.....and wht bout the part that says she receives a utility of two units on the last cent she spends...like were supposed to stop when the mu/p ratio is 2?

 

[JamesSmith]

yes that is actually a hint to marginal utility concept.

 

[djdead1]

again its question no.20 plz help yaar!! http://www.xtremepapers.me/CIE/index.ph ... _qp_31.pdf

u mean the one about government spending ryt?

 

[djdead1]

yes that is actually a hint to marginal utility concept.

ahan okay...thnku so much

 

[djdead1]

again its question no.20 plz help yaar!! http://www.xtremepapers.me/CIE/index.ph ... _qp_31.pdf

oops thnkd u by mistake

 

[JamesSmith]

again its question no.20 plz help yaar!! http://www.xtremepapers.me/CIE/index.ph ... _qp_31.pdf

this one was easy!
the government expenditure falls which shows fall in the national income (line comes below)(answer would be 2,3 or 4) the RATE of income tax was reduced which was the percentage (apply the concept of ad volerum) the line will change the direction( remove options 3 and 4) and hence it will now be E2

 

[djdead1]

again its question no.20 plz help yaar!! http://www.xtremepapers.me/CIE/index.ph ... _qp_31.pdf

current GDp = 40000

we have to achieve = 50 000

gap = 10,000

however gvnrment spending does not equal the amount of the gap bcz an increase in gvt spendoing will lead to MULTIPLIER times increase in RNI

so calclate multiplier frst


multiplier in 4 sector model = 1/ mps + mpt + m

= 1 / 0.05 + 0.3 + 0.15 = 2


so

10 000 = 2 * increase in GVT spending

therefore, increase in gvt spending = 10000/2 = 5000

final answer is 15 000 + 5000 = 20000

hope dt hlped !

 

[djdead1]

again its question no.20 plz help yaar!! http://www.xtremepapers.me/CIE/index.ph ... _qp_31.pdf

this one was easy!
the government expenditure falls which shows fall in the national income (line comes below)(answer would be 2,3 or 4) the RATE of income tax was reduced which was the percentage (apply the concept of ad volerum) the line will change the direction( remove options 3 and 4) and hence it will now be E2

havent u answerd the wrong question?

 

[JamesSmith]

oh my bad, i answered from p32..

 

[djdead1]

oh my bad, i answered from p32..

r u up fo more doubts??? i hav loadsov em

 

[Xenon]

nov 2004 , q4
and q21

 

[djdead1]

dese r ur doubts?

 

[Xenon]

yep..... budget lines always messes around and I am not sure how to calculate the mpc

 

[djdead1]

Ok for q21

multiplier will be 1/ mpc + mpt, right?

find mpc frst. but since theyre saying out of DISPOSABLE income, frst find that. dispsable income = income - t * income ( Y -tY)
= 1 - (0.4 * 1)
= 0.6


mps = 5/6
so mpc will be 1 - 5/6
and henc mpc out of disposable income will be : (1- 5/6) * 0.6 = 0.1


multiplier = 1 / mpc + mpt

= 1 / 0.1 + 0.4 = 2

 

[djdead1]

and for budget line question: since his budget line shows that now he is consuming less of good Y, means price of Y must have increased
and hes consuming more of X... increase in X is bigger dan decrease in Y......so his real money income has also increased..

also we can say his money income has increased bcoz owing to a fall in price of Y the value of his real money income rises his money can buy more dan beforee

 

[djdead1]

can u answer my questions?

 

[Xenon]

but were did u get this formula 1/ mpc + mpt
i knew multiplier being = 1/mpw = 1/(mps + mpt +mpm) [depending on the type of economy] = 1/(1-mpc)

 

[Xenon]

can u answer my questions?

which questions?

 

[djdead1]

but were did u get this formula 1/ mpc + mpt
i knew multiplier being = 1/mpw = 1/(mps + mpt +mpm) [depending on the type of economy] = 1/(1-mpc)

1/ mps + mpt + mpm is for a 4 sector model



they havmt mentioned imports or exports here right so tis wil b the formula