solve question no.4book: mathematics for economics. Writer: Chiang

17.4 1. On the basis of (17.10), find the time path of Q, and analyze the condition for its convergence. 2. Draw a diagram similar to those of Fig. 17.2 to show that, for the case of 8 = 8, the price will oscillate uniformly with neither damping nor explosion. 3. Given demand and supply for the cobweb model as follows, find the intertemporal equilibrium price, and determine whether the equilibrium is stable: (a) Qur = 18-3P1 Qst = -3+4P1-1 (b) Qat = 22 - 3P Qst = =2+ P1-1 (c) Qat = 19-6A Q51 = 6P1-1 -5 4. In model (17.10), let the Qat = Qs condition and the demand function remain as they are, but change the supply function to Q1 = - Y +8p; where P* denotes the expected price for period t. Furthermore, suppose that sellers have the "adaptive" type of price expectation: P * = P( 1 + 1 ( P1- 1 - P:1 ) 10 <>