What is:

A movement along a demand curve is best described as:

A a change in demand.

B an increase in demand.

C a decrease in demand.

D a change in quantity demanded.

Which one of the following events would shift the demand curve for Good X to the left?

A a decrease in the price of Good X

B a decrease in the price of a substitute good

C a decrease in the price of a complementary good

D an increase in the cost of supplying Good X

3.3 Which one of the following will shift the supply curve for Good X to the right?

A a decrease in labour productivity in Industry X

B a fall in the price of raw materials used to produce Good X

C an increase in real wages in Industry X

D a government sales tax on the production of Good X

3.4 A consumer's demand curve for Good X is represented by the equation:

Qd p 50 0.2

where Qd is the quantity of Good X demanded and p is the price of Good X.

A producer's supply curve for Good X is represented by the equation:

Qs p 10 0.6

where Qs is the quantity of Good X supplied and p is the price of Good X.

Demand and supply are in equilibrium when:

A Q is 20 and p is 150

B Q is 30 and p is 100

C Q is 35 and p is 75

D Q is 40 and p is 50

Using the assumption of a uniform distribution of deaths in each year of age and the Illustrative Life Table with interest at the effective annual rate of 6%, Calculate a. tire: IEism Ies b. Vari) for x = 20, 50, 80. [I Iint: Use {5.2.3}, {5.2.9}, and {4.431).} Using the values obtained in Exercise 5.1, calculate the standard deviation and the coefficient of variation, ow" u, of the following present-value random variables. a. Individual annuities issued at ages 20, 50, 80 with life incomes of 1,000 per year payable continuously. b. A group of 100 armuities, each issued at age 50, with life income of 1,000 per year payable continuously. Show that Varfe) can be expressed as 2 _ E (a: _ 2&1) _ HE! where 2:11, is based on the force of interest 23. Calculate Cov(5 , UT). If a deterministic (rate function) approach is adopted, (5.2.27) could be taken as the starting point for the development of a theory of continuous life an- nuities. For this, we would begin with da 5': [u(v}+la, 1 ravens r15, = [l or E y. a. Use the integrating factor exp{Ig[u(z) + 5M2} to solve the differential equation to obtain (5.2.3). b. Use the integrating factor e45\" to obtain a. = m f E's- a My) dy and give an interpretation of it in words. Assume that Mac + t) = p. and the force of interest is B for all t E 0. a. If Y = a T1, 0 E T, display the formula for the distribution function of Y. Y JaT OST <>