MGEB06H3 Study Guide - Quiz Guide: Autarky, Shortage, Government Spending

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEB06H3
• Professor: Jack Parkinson

Document Summary

Ecmb06 assignment 1 answer key fall 2011. Part (a) (5 points) (must show work for credit) G = t + 0. 15y = 6750 + 0. 15(67500) = 16875. 9750 + 1500r = 16500 1000r r = 10. 5 (10. 5%) C = 30000 + 0. 5(67500 6750) 1500(10. 5) I = 67500 44625 16875 = 6000. W/p = mpl = (3/4)[2k1/4l 1/4] = (3/4)[2(10000)1/4(50525) 1/4] R/p = mpk = (1/4)[2k 3/4l3/4] = (1/4)[2(10000) 3/4(50625)3/4] The level of total factor productivity increases by 50%, the new production function: G = t + 0. 15y = 10125 + 0. 15(101250) = 25312. 5. Equilibrium of the long-run classical model is given by: s = y c g = i (1 pt) 375 + 1500r = 16500 1000r r = 6. 45 (6. 45%) C = 30000 + 0. 5(101250 10125) 1500(6. 45) Real wage for labour, w/p: (1 pt) I = s = y c - g. I = 101250 65887. 5 25312. 5 = 10050. W/p = mpl = (3/4)[3k1/4l 1/4] = (3/4)[3(10000)1/4(50525) 1/4]