Question: Hello, I need the answer to this question please. Question I [25 points] Consider an economy in which the representative consumer preferences are described by

Hello, I need the answer to this question please.

Hello, I need the answer to this question please. Question I [25

Question I [25 points] Consider an economy in which the representative consumer preferences are described by U(C,I) = 02/513/5. The total number of hours available to the representative consumer is h = 1, and the market real wage is w. The representative firm produces the final consumption good using the technology function Y = =/ where N is the labour, and z = 3. Assume the government sets the level of its spending to G = 0.75 which has to be financed through a proportional tax t. 1. What is the equilibrium wage w* in this economy? [05 points] 2. Find the Pareto optimal allocation (Ipo, Npo, Ypo, Cpo) by solving the social planner's problem. [07 points] 3. Find the competitive equilibrium allocation (tCE, ICE, NCE, YCE, CCE). [08 points] 4. What do you conclude? [05 points]

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