
Exercise 3: Consider the following discrete model for drug prescription an +1 = an-kan + b,...
HOMEWORK 4 (due Oct. 1). Hatremnntien Consider the discrete model x f(x,)where f(x,) g(x,) * g(x,)= r-1 1+ K and K>0, r >1 are fixed parameters. Use Mathematica to calculate: The fixed points; (i) The derivative of f(x); (ii) The stability of each fixed point. (iii) Also, repeat items (i)-(iii) when K 1 ánd r 2 and confirm the conclusion of item (iii) through cobwebbing.
EC2040-5 Question 2 [40 points] Consider the following macroeconomic model: Y=C+10 + Go c-a+b(Y-T) Where the endogenous variables are Y,c and T, while the exogenous variables are Go and lo. The parameters are such that a > 0,d 0,0 < b a) Set up the model in matrix form. [5 points] b) Find the inverse of the matrix of parameters [10 points] c) Use Cramer's rule to find equilibrium income Y and equilibrium taxes [10 points] d) Find and discuss...
Consider a firm with the following production function y = 20K21 For the whole exercise let the price of a unit of capital be $200, the price of a unit of labor be $150 and consider the case where capital is fixed at K = 1. a) Calculate the short run profit of the firm when the price of output is $300. (5 points) b) Calculate the short run cost function. (5 points) c) On the same graph, plot the...
3 Exercise 3 - Basic OLG model Consider the following two-period OLG model. People consume in both periods but work only in period two. The inter-temporal utility of the representative individual in the first period is where c and c2 are consumption and kı (which is given) and k2 are the stocks of capital in periods one and two. ns is work and is government expenditure in period two which is funded by a lump-sum tax in period two, T2....
Exercise 1 Consider the following APT-style model: where rA and rM are excess returns on, respectively, an asset A and a market index and π is the inflation rate. You have observed a sample of 88 data points and estimated the ß vector by OLS, resulting in: 0.4, βι 1.5 and β2-0.8, with standard errors, respectively, 0.6, 0.2 and 0.5. You want to compare this model with the standard CAPM model (with intercept) Based on the information you have now.,...
Consider the model of a small DC motor, where the following parameter values are assumed: R-10 L-10mH,J-0.01kgm0.0.05 2. ra a. Write down the transfer function of the system b. Choose a sample time for the system c. Find the pulse transfer function (use MATLAB 'c2d' command) d. Find the range of K for stability for the closed-loop sampled-data system
Consider the model of a small DC motor, where the following parameter values are assumed: R-10 L-10mH,J-0.01kgm0.0.05 2. ra a. Write...
4. Points = 18. Consider IS-LM Model: Real Sector: Y=C+I+G C = a +b (1-t) Y I=d-ei G=Go t-income tax rate i-rate of interest Money Market: Ma=M Ma= kY-li Mg = Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a = 10; b = 0.7; t = 0.2; d...
Consider the following static (closed-economy) version of the Classical model: Y = F (K, L) C = A + a(Y − T ), with A > 0 and 0 < a < 1, I = B − br, with B, b > 0, where A and B represent respectively the autonomous components of consumption (C) and investment (I). Assume the factor inputs, K (capital) and L (labor), are fixed in supply. Finally, assume that government expenditures (G) and taxes (T)...
Exercise 11.3 Consider the following duopoly model. There are two firms sup- plying a market where demand is given by p(Q)- a-bQ. Firm i produces qi units of output and so the total level of production is q1q2. Both firms face the same constant marginal cost, so the cost of producing qi for firm i įs cqỉ. Thus the profit functions of firms 1 and 2 respectively, are given by: (a) Suppose that each firm takes the output of the...
1. Consider the following discrete time one-period market model. The savings account is given by Bo 1 and B1 1.1. The stock price is given by So 1 and S,-ξ where ξ is a random variable taking two possible values u 1.2 and d = 0.9. Consider a put option whose payoff at time l is P = (1-S)+. (a) Find a replicating strategy for this option. By considering the value of the replicating strategy, find the time 0 price...