Question
can you please find the solution for all the 5 questions please? 1 One-Period Model 1. i: a Suppose that Cookie Monster's pro? duction function
can you please find the solution for all the 5 questions please?
1 One-Period Model
1. i: a Suppose that Cookie Monster's pro? duction function is given by zF (K, Nd) = z V'KNd, withz = 16 and K = 1?15 Suppose also that w = 1. Write his pro?t maximization problem, find op? timal labor demand N d'" and compute the maxi- mized pro?t 41:".
2. 'k a Suppose that Cookie Monster's utility function is given by u(C, I)=C+4VI+2. Given to and if" found in item 1, h = 16 and G = T = 2, write his utility maximization problem and ?nd his optimal consumption bundle C* and i*.
3. 'k a Write the production possibility fron? tier as a function of I.
4. id: m Would the labor market clear with the labor demand and supply found in items 1 and 2? Justify. If not, is to too high or too low? In which direction does the labor market push w?
5. i 1k it n Compute the equilibrium (Hint: You may start from labor market clearing condition then ?nd numerical values for m, N d, N", Y, 1, TE, C).
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