1. The economy of a country has the following behavior: C = 250 + 0.95Yd; I = 420; G=380; t = 0.75. With it, get the following:

a) Calculate the income level.

b) Compute the new equilibrium income if government spending decreases by 15%.

2. If we have a hypothetical economy represented by the following function of Cobb-Douglas type production: Y = K N^1- with = 0.4 ; N=250; K=500; answer the following:

a) Calculate the value of total production.

b) Based on the production function algebraically determine the productivity margin of capital (K).

c) With the result of the previous section, calculate the value of the marginal productivity of capital and labor