Macroeconomics, Problem Set #3 Due: Friday, October 26, 2017 The questions below are due at the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Macroeconomics, Problem Set #3 Due: Friday, October 26, 2017 The questions below are due at the beginning of class If you believe your handwriting is readable, you can submit a copy of handwritten homework. Otherwise, your answers should be typed. #1. Suppose the production function in medieval Europe is Y = K05L0s, where K is the amount of land and L is the amount of labor. The economy begins with 100 units of land and 100 units of labor. Answer the following questions. a. Does this production function have constant, increasing, or decreasing returns to scale? Use math to support your answer. b. How much output does the economy produce? c. What is the marginal product of labor when L = 100? (Hint: holding land fixed at K = 100) d. What is the marginal product of land when K = 100? (Hint: holding labor fixed at L = 100) #2. Consider an economy described as follows: Y=C+I+G Y = 8,000 G = 2,500 T = 2,000 2 C = 1,000+ (Y-T) /= 1,200-100r a) In this economy, compute private saving, public saving, and national saving. b) Find the equilibrium interest rate. (The interest rate here is a percentage. For example, if you find r = 2, then the interest rate is 2%.) c) Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d) Find the new equilibrium interests rate. (Again, the interest rate here is a percentage. For example, if you find r = 5, then the interest rate is 5%.) Macroeconomics, Problem Set #3 Due: Friday, October 26, 2017 The questions below are due at the beginning of class If you believe your handwriting is readable, you can submit a copy of handwritten homework. Otherwise, your answers should be typed. #1. Suppose the production function in medieval Europe is Y = K05L0s, where K is the amount of land and L is the amount of labor. The economy begins with 100 units of land and 100 units of labor. Answer the following questions. a. Does this production function have constant, increasing, or decreasing returns to scale? Use math to support your answer. b. How much output does the economy produce? c. What is the marginal product of labor when L = 100? (Hint: holding land fixed at K = 100) d. What is the marginal product of land when K = 100? (Hint: holding labor fixed at L = 100) #2. Consider an economy described as follows: Y=C+I+G Y = 8,000 G = 2,500 T = 2,000 2 C = 1,000+ (Y-T) /= 1,200-100r a) In this economy, compute private saving, public saving, and national saving. b) Find the equilibrium interest rate. (The interest rate here is a percentage. For example, if you find r = 2, then the interest rate is 2%.) c) Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d) Find the new equilibrium interests rate. (Again, the interest rate here is a percentage. For example, if you find r = 5, then the interest rate is 5%.)
Expert Answer:
Answer rating: 100% (QA)
Problem 1 Medieval European Production Function a Returns to Scale The production function exhibits ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these economics questions
-
Use the information on the kumquat market in the table to answer the questions. (Quantities are given in millions of crates per year.) Price (Per Crate) Quantity Quantity Demanded Supplied $10 140 40...
-
Consider again the two ways in which we can view the producers profit maximization problem. A: Suppose a homoethetic production technology involves two inputs, labor and capital, and that its...
-
A: Suppose you have a homothetic production technology and you face input prices (w,r). (a) On a graph with labor on the horizontal and capital k on the vertical axis, illustrate a ray along which...
-
Metlock Advertising Agency Inc. was founded in January 2000. Presented below are adjusted and unadjusted trial balances as at December 31, 2023 Cash Accounts receivable Supplies Prepaid insurance...
-
Use the model of perfect competition described in this chapter to explain, illustrate, or elaborate on the following statements. a. "Increasing competition from new firms entering the market is good...
-
TESLA Discuss how the stock for your company is trending. Discuss some of the factors, including environmental, sustainable, and governance (ESG) factors, that you believe have impacted the stock...
-
Walgreens Boots Alliance, Inc. (Walgreens) is a global pharmacy, health and well-being company. It operates over 13,000 stores in 11 countries, generating net sales of \($103.4\) billion. The...
-
Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer season and the business is heavily dependent on the weather and the economy in...
-
E11-6 (Algo) Recording and Reporting Stockholders' Equity Transactions [LO 11-2, LO 11-4] Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares of no-par...
-
The figure below shows the demand curve for a U.S. farmer for irrigating his land. It costs $100 per acre to irrigate the land. Each acre of land irrigation generates salty runoff that winds up in...
-
2 Answer saved Marked out of 1.00 Flag question Question text Computerised AISs help to: i. Process and transform data into information; ii. Guarantee that financial statements are free from errors;...
-
Q1) What is the % of sales won in comparison to all the prospects identified (including Unqualified and lost Prospects)? (Please provide step by step as it needs to input into Excel Sheet) (The data...
-
BTI Inc. decided not to submit an offer/proposal on this effort, what three things could the Government have done to improve competition? Explain why you believe these three things would have...
-
There does not seem to be much to the Organizational Test for tax-exempt status. Why is it so important that the formation documents of the organization have particular language in them?
-
Jack is at Walmart and has been accused of shoplifting. Using the Shopkeepers privilege, discuss what Walmart is and isn't allowed to do from when they initially approach him all the way until the...
-
igor's sister Olga wanted to help Igor so she invested $30,000 in the business. Olga wanted to participate in the profits but did not want to be involved in running the business. This is what kind of...
-
Compute the following Output Tax due for the Month PH TAXATION Business Restaurant and also define and explain PH taxation? Domestic purchase of goods other than Capital Goods P 100,000 Domestic...
-
You have accepted the engagement of auditing the financial statements of the C. Reis Company, a small manufacturing firm that has been your auditee for several years. Because you were busy writing...
-
Quince Corporation has taxable income of $450,000 for its 2012 calendar tax year. Calculate the corporation's income tax liability for 2012 before tax credits. $_________
-
Kent Pham, CPA, is a 45-year-old single taxpayer living at 169 Trendie Street, La Jolla, CA 92037. His Social Security number is 865-68-9635. In 2012, Kent's W-2 as the controller of a local...
-
Rebecca and Walter Bunge have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Rebecca is a homemaker and Walt is a high school teacher. Rebecca's Social...
-
The economy of large-scale production _________ new firms from entering a market because high initial average total costs impose heavy losses on new entrants.
-
Because they are mutually interdependent, oligopolists are tempted to get together and agree to act jointly, or to _________, to reduce uncertainty and raise profits.
-
Mutual interdependence means that no firm knows with _________ what its demand curve looks like. The demand curve and the profit-maximizing price and output will depend on how others _________ to the...
Study smarter with the SolutionInn App