Part 1: A Closed-Economy One-Period Macroeconomic Model1- Given that: U(C,L)= CL%And the Production function is: Y=z*N where, z=1 h=1 G=0a) Show that (C,L)=(2, is a Competitive equilibrium (CE)b) What about the allocation (C,L)= (1/2, 1/2)? is it a CE?2- Solve the numerical example (see Slide 48)I

The given macroeconomic model includes the production function and a representative utility…

1- Given that: U(C,L)= C ¾L ¼ And the Production function is : Y=z*N_ where, z=1 h=1 G=0 a) Show that (C,L)=() is a Competitive equilibrium (CE) b) What about the allocation (C,L)= (1/2, 1/2)? is it a CE?

1- Given that: U(C,L)= C ¾L ¼ And the Production function is : Y=z*N_ where, z=1 h=1 G=0 a) Show that (C,L)=() is a Competitive equilibrium (CE) b) What about the allocation (C,L)= (1/2, 1/2)? is it a CE?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Part 1: A Closed-Economy One-Period Macroeconomic Model
1- Given that: U(C,L)= CL%
And the Production function is: Y=z*N where, z=1 h=1 G=0
a) Show that (C,L)=(2, is a Competitive equilibrium (CE)
b) What about the allocation (C,L)= (1/2, 1/2)? is it a CE?
2- Solve the numerical example (see Slide 48)
I

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