Given prices, p, and wages, w, consumers choose consumption, c, and hours worked h, to solve...

  

Transcribed Image Text:

Given prices, p, and wages, w, consumers choose consumption, c, and hours worked h, to solve 1 1 max_log(c) +log(1 h) s.t. pc = wh Given prices, p, and wages, w, firms choose an output quantity, q, and labor hours to hire hf, to solve Global Markets Clear maxpq - wh q,hf s.t.q = 2hf c = q hc = hf 1. (0.5) Write the Social Planner's Version of the model above. 2. (1) What are the numerical values of p, w, c, hc, q, hf? [Note: You will need to use Walras Law! Use a value of 1]. Activate Windows Go to Settings to activat 3. (0.5) What is GDP equal to in this model? Clearly link the definition you use to the variable(s), and the value you compute. Given prices, p, and wages, w, consumers choose consumption, c, and hours worked h, to solve 1 1 max_log(c) +log(1 h) s.t. pc = wh Given prices, p, and wages, w, firms choose an output quantity, q, and labor hours to hire hf, to solve Global Markets Clear maxpq - wh q,hf s.t.q = 2hf c = q hc = hf 1. (0.5) Write the Social Planner's Version of the model above. 2. (1) What are the numerical values of p, w, c, hc, q, hf? [Note: You will need to use Walras Law! Use a value of 1]. Activate Windows Go to Settings to activat 3. (0.5) What is GDP equal to in this model? Clearly link the definition you use to the variable(s), and the value you compute.