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Title: Economics - MACRO EXAM NOTES

Essay Details:

Subject: Business
Author: Sandra M
Date: September 15, 2015
Length: 4 / 1165

Essay text:

(2 marks) Optimality condition: MRS=- pc/ph. --> -4h/c=pc/ph. (1 mark) Substituting this expression into the budget constraint pcc+phh=m, you will find: c=4/5*m/pc, h=1/5*m/ph. (2 marks) B) (5 marks) Jennifer works in an office building with 399 other people who each have the same preferences and lunch income as Jennifer. What is the market demand function for this group of 400 individuals? Answer: Aggregate demand=400* 1/5*m/ph. C) (5 marks) When each person's m = $30, and when ph = $4, what will the total number of hot sandwiches demanded be? Answer: 60. D) (5 marks) Find the price elasticity of demand for hot sandwiches when ph = $4 and each person's m = $30...

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