QUESTION 3 [3 Marks] In macroeconomic modelling we often make the assumption of a single representative consumer. Briey discuss whether you agree or disagree with this approach to modelling. QUESTION 4 [7 Marks] 4.1 4.2.1 4.2.2 In the real intertemporal model the labour supply curve is upward sloping. Explain why this curve is upward sloping by referring to the marginal decision that the consumer needs to make with respect to labour supply. [2] The representative rm decides to invest where marginal benet is equal to marginal cost. If we assume that the marginal cost of investment is equal to one and that the marginal benet from investment is the marginal product of future capital plus the quantity of capital that will be left in the future after depreciation, all discounted back to the present, show that the rm's optimal investment rule is MP\" ' d =r . [3] Explain what this investment rule means for the rm with respect to the assets it holds in its portfolio. What decision does the rm face here? [2]