Consider an economy divided into an agricultural sector (A) and an industrial sector (I). To produce 4 1 one unit in sector A requires 6 unit from A and unit from I. To produce one unit in sector I requires 1 + unit from A and 4 unit from I. Suppose final demands in each of the two sectors are 60 units. Write down the input-output matrix equation for this economy, and then find the number of units that have to be produced in each sector in order to meet the final demands.
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- 3. Suppose that we have a Solow model with one twist. The twist is that thereis a government. Each period, the government consumes a fraction of output,sG. Hence, the aggregate resource constraint is:Yt = Ct + It + Gt.Where Gt = sGYt. Define private output as Ypt = Yt − Gt. Suppose thatinvestment is a constant fraction, s, of private output (consumption is then1 − s times private output). Otherwise the model is the same as in the text.104(a) Re-derive the central equation of the Solow model under this setup.(b) Suppose that the economy initially sits in a steady state. Suppose thatthere is an increase in sG that is expected to last forever. Graphicallyanalyze how this will affect the steady state value of the capital stockper worker. Plot out a graph showing how the capital stock per workerwill be affected in a dynamic sense2. Which of the following statements is the best articulation of Malthusian dynamics?(A) “Technology will endeavour to make us increasingly less reliant upon fixed resources, since said resources can be stretched out in an exponential manner.”(B) “It is not possible that we can sustain ourselves indefinitely with fixed resources.”(C) “Since population grows exponentially, and farmland only grows linearly, human beings are cursed, in the long-term, to live in subsistence.”(D) “The wealthiest nations have the lowest population growth levels, but have also destroyed their environment with careless pollution that impedes on their ability to cultivate food.”Suppose that the economy in the Jatinagor area has a Production Possible Limit with the equation X² + 4Y² = 64. Calculate what the value of X is if Y = 0 and what is the value of Y if X = 0 What is the opportunty cost of X if Y is constant in the economy or does it depend on the levels of output produced? Explain!
- Suppose an economy produces only 2 products that will also be used for directconsumption, as per the article at the end of the exam: chicken wings and donuts. Inthe second quarter of 2021 (the base period), 180,000 pounds of chicken wings wereproduced, at a value of $3.50 per pound, while in the second quarter of 2022,production of chicken wings increased to 200,000 pounds, at a value of $3.75 perpound. In the second quarter of 2021 (the base period), 85,000 donuts were producedat a value of $0.85 per donut, while in the second quarter of 2022, donut productionincreased to 100,000 donuts, each at a value of $0.95 per donut. The population inthis economy is 1000 individuals in 2022, while the number of hours worked in 2022is 5000. Also, the quantities that were produced in 2021 represent the quantities thatwere purchased by the typical household, meaning that everything that was producedwas sold.d. Solve for the amount of labor productivity in the second quarter of 2022.e. Solve for the…3. Consider a world in which production of a good or service consists of a number of definitive tasks, which must all be performed correctly for the product to have positive value. Each task is filled by a single worker i whose skill level qirepresents the probability the worker performs her task correctly. Mathematically, if there are n tasks in the production of a good, and average production per worker with one unit of capital is 1 when all tasks are performed correctly, the production technology can be represented as: A) Give an example of an industry for which this might be a good model of production. What does this production function imply about the tradeoff between quality and quantity of labor in a given task? In this, how does it differ from a Cobb Douglas production function? B) Find the marginal product of increasing the skill of the ith worker. Suppose now there were two firms in the same industry that will bid for workers, and can pay them differentially according to…Show that, when using a traditional economic production function,doubling our population can double our output if capital stocks alsodouble. Use the production function: Q = AK L , where A representstechnology in an economy, K capital, and L labor. Double K and L andshow that Q also doubles, assuming α=β=1/2. Now show that, when we incorporate natural capital into thediscussion, doubling the population does not increase output in thesame way (since natural capital cannot also grow). Use theproduction function: Q = AK L N , where N is natural capital. DoubleK and L and show that Q less than doubles, assuming α=β=γ=1/3.
- Suppose U.S. drivers purchased $50 billion of ExxonMobil-produced gasoline during a recent year, with one-half purchased directly from ExxonMobil-owned gas stations and one-half from independent (or third-party) gas stations. Suppose further that ExxonMobil purchased the oil (which it refined into gasoline) from foreign producers for $20billion and that it receives 60 percent of the sales revenue that independent stations generate from selling ExxonMobil gasoline. In this case, the value added by ExxonMobil to U.S. GDP is $__billion.Consider the production productivity matrix of two goods from the US and India: United States of America India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 4. How many units of automobiles will the US produce should it exhaust half of its labor force to produce automobiles? Group of answer choices 20 10 25 Not enough data 5. How many units of automobiles will India produce should it exhaust all its labor force to produce automobiles? Group of answer choices 20 16 25 12The economy of Ghana is made up of three sectors namely Agriculture, Industry andServices. These three sectors contribute to the national output. For decades prior to the2000s, the Agricultural sector contributed the most to the national output. Sadly, inrecent years however, the sector has been the least contributor to national output.Trends in production of major food crops such as maize, rice and sorghum show thaton-farm productivity has stagnated and the exploitable difference between the actualand the potential output of most of the crops (yield gap) has widened. Low andinadequate levels of usage of productivity enhancing technologies such as quality seedsof improved varieties and fertilizer, thin extension services and weak market linkagescontributes to the poor agricultural performance. It was against this background thatthe NPP-led government implemented one of her flagship programmes “Planting for Food and Jobs”.The programme is primarily aimed at making subsidized improved…
- describe the long-run effects of the pandemic using the Heckscher-Ohlin model with a labour-intensive shoe-producing sector and a capital-intensive computer-producing sector. In this model both labour and capital can reallocate across sectors. (c) What happens to the output of shoes and to the output of computers? Does the structure of economic output become more capital-intensive or labour-intensive? please answer correct asap plzConsider the production productivity matrix of two goods from the US and India: United States of America India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 1. How many units of corn will the US produce should it exhaust all its labor force to produce corns? Group of answer choices 20 16 25 Not enough data 2. How many units of corn will India produce should it exhaust 3/4s of its labor force to produce corns? Group of answer choices 20 16 25 12 3. Between the USA and India, which country has a comparative advantage in the production of automobiles? Group of answer choices India USA None of the countries Not enough data 4. How many units of automobiles will the US produce should it exhaust half of its labor force to produce automobiles? Group of answer choices 20 10 25 Not enough data 5. How many units of automobiles will India produce should it exhaust all its labor force to produce automobiles? Group of answer…(50 points) Consider the two-period economy with investment discussed in class. Forthe sake of simplicity, assume that the utility is time separable and that the per-periodutility is equal to:u(C) = log CAssume also that the technology to produce the consumption goods has constant returns to scale. Moreover, capital is the only input to production. Hence the currentperiod technology can be represented as:Y = zK1where Y , K, and z stand for output, capital and total factor productivity in the currentperiod. The future period technology is akin to the current period technology. There isno government expenditure in the current and future period so that G = 0 and G0 = 0.Finally there is full capital depreciation, namely δ = 1.(a) (10 points) Write down the social planner’s problem. State the variables withrespect to which the social planner maximises.(b) (10 points) Derive the first order conditions to the planner problem. Rearrangethere condition to find the conditions characterising the…