1 Short Answers 1. For each of the following types of money, give an example of it: (a) Commodity money: (b) Precious metal: (c) Digital currency: 2. Give an example where a barter economy is less efcient than an economy with money. Make your example concrete: who are the people in the economy? What do each person want and need? Why barter is inefcient? 2 Solving for Equilibrium On an island lives 2 persons, you and neighbor. You have an avocado tree, which grows 150 avocados this year, 50 next year. Your neighbor's tree grows 20 this year, 160 next year. Both you and neighbor has product utility 0102. What will be end up being the agreement between you and your neighbor? 3 Solving for Equilibrium In a huntergatherer society lives 2 people, Adam and Smith. Adam is a hunter and he catches 10 bears a week. Smith is a gatherer and he gathers 50 gigantic wildberries a week. Both Adam and Smith enjoy eating bears and wildberries and have utility function 01,01\". 1. Under agreement \"1 bear = 2 wildberries\". How many bears does Adam want to sell? How many bears does Smith want to buy? Is this an equilibrium outcome? 2. Solve for equilibrium exchange rate. 4 Overlapping Generation Economy In an OLG economy: 1. Draw a table to represent the demographic structure. (Horizontal axis: time; Vertical axis: generation) 2. Suppose each gen has 10 bananas when young, 0 when old. Explain the outcome (what is cg and co, what is the happiness of each generation). 4 Overlapping Generation Economy In an OLG economy: 1. Draw a table to represent the demographic structure. (Horizontal axis: time; Vertical axis: generation) 2. Suppose each gen has 10 bananas when young, 0 when old. Explain the outcome (what is cy and co, What is the happiness of each generation). 2 3. What cannot generation 1 (us) trade with generation 2 (kids) in OLG economy