Question: answer 2nd question Consider a closed economy with consumption, production, and government. The representative consumer always desires a consumption bundle where the quantities of consumption

answer 2nd question

Consider a closed economy with consumption, production, and government. The representative consumer always desires a consumption bundle where the quantities of consumption and leisure are such that C-al and a = 1. Suppose that profit = 8, and T = 6. Show the following on your answer sheet. [1] Suppose initially, in this economy, we had w = 0.75. In a diagram show what would happen if everything remaining the same, wage increases [2] Calculate how much will be the new C, if new w = 1.5. (Don't forget that after you finish answering all questions from this entire Part X, you need to upload your photographed/scanned answer in another (respective) assessment in eClass. You can not upload those handwritten pages in this assessment). (3) To complete your answer to this question, enter only the numerical value of optimal C (that you calculated in step [2] above) in this blank here (no decimals please)

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