1. Tables represent one form of representing information graphically and can, as we saw in the Gotti trial, be very effective at conveying information to the reader. You are to track down what you consider to be a valuable / effective table from some discipline other than economics and then reproduce it on your own spreadsheet which you will send to me electronically. You need to also pass in a copy of the original so I can see how good you were at reproducing the original table as well as a brief memo in which you indicate why you chose this table.
2. Spreadsheets can be very powerful devices for working with numbers, but if you are to unleash that power you will need to know how to effectively program the spreadsheet. For practice I have supplied you with some simple data sets. Each group will be responsible for one of the data sets. You will download the data set and follow the instructions. You should send the data set to me electronically at least 24 hours before it is due.
#3 Population Projections: by Age
#4 Regional Population: Historical Data
#6 Regional Population: Projections
#7 Population of World's Largest Cities
#8 Metropolitan Area Projections
3. Poverty is a problem that to many seems intractable. One of the possible solutions to the problem is to establish a negative income tax. The negative income tax is designed to replace the myriad of programs established to help the poor such as AFDC and food stamps with a simple extension of the income tax. The program is quite simple. All individuals below a certain level of income receive a subsidy, a negative tax, while all those above that level pay some tax. There are two important parameters in the program. The first is the cutoff level of income and the second is the tax rate. I want you to assume that everyone is guaranteed an income of $6,000. Furthermore, I want you to assume that every dollar that you make will reduce your payment from the government by 50 cents. I want you to use Excel to determine the level of subsidy or tax for all individuals with incomes between $0 and $50,000. You only have to look at intervals of $1,000. I want a column for income and a column for taxes/subsidy. After you have done this I want you to redo it under the assumption that the tax rate is 40 percent.
Advanced Questions
A. The marginal cost curve of producing TRATS has been estimated as:
MC = 40.35 -2Q + .1Q2 where Q is in 1,000s
The level of fixed cost is currently $200,000 and from your calculus courses you know that for all cost curves the following is true:
If AVC = a + bQ + cQ2 then MC = a + 2bQ + 3cQ2
With this information you are to:
a. derive the equations for TC, VC, AC, AVC
b. construct a table containing the values for FC, TC, VC, AC, AVC, and MC for Q in the range 0 to 100 (use intervals of 5)
c. graph TC, VC, and FC on one graph
d. graph MC, AC, AVC, and AFC on one graph
e. redo 2 and 3 assuming that fixed costs are now $300,000
B. In Economics we are very interested in the market adjustment process-- something that can not be examined in your simple static models common in the introductory and intermediate theory courses. To start you in this direction I have constructed the following simple structural model that explains the relationship between income (Y), Consumption (C), Investment (I), and Government (G) spending. [Note: the -1 notation represents last period. When we work with dynamic models we need to be sure that each variable has a time dimension. The variables without -1 are for this period]
Y = C + I + G
C = 200 +3/4*Y-1
I = .1*(Y - Y-1)
G = 100
With this information you are to answer the following questions:
a. Identify the endogenous and exogenous variables.
b. Solve for the reduced form equation for Y. Remember that lagged dependent variables are to be treated as independent variables when we are out of equilibrium.
c. Equilibrium in a dynamic model is defined as a state where there is no tendency to change, i.e. where the dependent variables do not change over time. Solve for the equilibrium level of income. HINT In equilibrium Y = Y-1
d. If the economy begins today in equilibrium, trace through the values of Y for the next twenty periods if G is increased to 200.
e. Redo (d.) under the assumption that the accelerator coefficient changes from .1 to .5.
.