a) With reference to the income and substitution effects give an account for the backward bending labour supply curve for the economy. b) Given the above behavioral and semi behavioral equations C = 100 + 0.8Y đ i= 10– 0.5, L=y – 100r M = 5000¸ P = 10 g=800, tax rate is 32 percent Obtain the IS and LM equations ii. i. Equilibrium values of Y and R Mathematically derive the aggregate curve assuming that the price level increases by 20%. ii.

a) With reference to the income and substitution effects give an account for the backward bending labour supply curve for the economy. b) Given the above behavioral and semi behavioral equations C = 100 + 0.8Y đ i= 10– 0.5, L=y – 100r M = 5000¸ P = 10 g=800, tax rate is 32 percent Obtain the IS and LM equations ii. i. Equilibrium values of Y and R Mathematically derive the aggregate curve assuming that the price level increases by 20%. ii.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.10P

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