For questions regarding the mathematical analysis of economic models and problems. This includes questions about the formulation or solution of models from microeconomics or macroeconomics.
Questions tagged [economics]
1602 questions
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3 answers
Why would Annual Percentage Interest Rate per period be calculated using division instead of n-th root?
It happens on many places on the web. Even economics professors would divide the annual interest eg. by 12, instead of calculating 12-th root.
For example interest rate for 3% APR target with montly payments (12 periods) is calculated as: 1 +…
FranG
- 21
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1 answer
How to find a Marshallian demand?
I have many doubts with this exercise of microeconomics. I do not know if anyone could help me please. Thanks in advance.
Let $x$ be the food consumption of a household, and be $y$ the consumption of clothes. The preferences of a household can be…
mathsalomon
- 1,369
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1 answer
Market price Pt at any time
So I have this question and answer to it which one part i'm stuck understanding, here's the question.
Given demand & supply functions as = 86 − 0.8 and = −10 + 0.2 −1
Find:
a) the market price
in any time.
Here's the answer which I…
user634512
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1 answer
Basic interest question
I have a really stupid question. I'm trying to figure out how long it will take someone to pay off their credit debt. So this is what I'm given:
Someone owes $800
Have an annual interest rate of 12%
And they pay off $60 a month.
How many years will…
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2 answers
Exact Simple Interest Problem
Determine the exact simple interest on 1,000,000 invested for the period from October 24,1987 to January 7, 1990; if the rate of interest is 17%.
What I've tried:
October 24, 1987 to October 24, 1988 -> 365 days
October 24, 1998 to October 24, 1989…
Jayce
- 483
1
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1 answer
Interest rate problem
I am supposed to solve this problem: mexican interest rate is 28%, interest rate in the US is 7% and exchange rate is 7.5 Mexican pesos for 1 US dollar. If interest rate parity applies and we don't take political risks into consideration, what…
Peter
- 13
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1 answer
Monthly change formula logic.
I need an explanation of the formula:
monthlyChange=(newValue-oldValue)/oldValue
Why to divide by old value? Apparently the difference is described well just via subtracktion "newValue-oldValue".
Josef Klimuk
- 187
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1 answer
How to improve general mathematical literacy?
Hi I'm a Sophomore in economics attempting to read published economics papers. I often encounter models such as the one below:
I've taken several lower-level mathematics courses but have difficulty with fully comprehending models such as the one…
Taylor Tam
- 79
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1 answer
Is compound interest better than simple interest at all times????
I was recently calculating compound interest for one of my questions and I came to one quite intruiging problem
so from what I understand
simple interest is!
when you have the same amount of interest every year
so
e.g Principal amount is $100$ and…
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0 answers
Micro-Econ Question | Price Elasticity and demand changes
You sell car insurance to low-income consumers. You have the cheapest rates in Texas—just $30 per month—and you have 100,000 identical customers. You estimate that the price elasticity of demand for your insurance is - 0.1.
________ a. If…
Koolakuf_DR
- 113
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Find government budget at the equilibrium level of income and there is a surplus or deficit
Consider an economy in which taxes are autonomous and the following values of autonomous consumption, planned investment, government expenditure, autonomous taxes, and the marginal propensity to consume are given: Ca=1,400 Ip=1,800 G=1,950 Ta=1,750…
Zynnette
- 11
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3 answers
Percentage Plateau
We're trying to figure out something, and things aren't adding up. The senario is that you make $\$ 50,000$ a year. Every year you get a $15\%$ bonus of that income, which then gets added to your next year's income. So, the first year, you get $\$…
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2 answers
Maximum feasible output of a company
Imagine, I have following model.
There is a company X, which produces one unit of final output from
0.2 units of input A and
0.8 units of input B.
Inputs A and B are bought from respective markets.
Let
the market price of A be 40 dollars,
the…
Glory to Russia
- 146
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0 answers
Find the period of deferral if a monthly payment is $9000$ for $9$ years and it will start $9$ months from now on.
I have some questions on how to answer these problems. These questions were asking me to find the period of deferral in each of these deferred annuity
problems. The questions are:
Find the period of deferral if a monthly payment is $9000$ for $9$…
fitzmerl duron
- 1,495
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0 answers
A cash loan is to be repaid by paying $13500$ quarterly for three years starting at the end of four years. If the interest rate is $12$%
I was helping my comrade answer some questions when we found this question. It goes like this:
A cash loan is to be repaid by paying $13500$ quarterly for three years starting at the end of four years. If the interest rate is $12$% convertible
…
fitzmerl duron
- 1,495