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Extra Question for Assignment 2. [10% in final grade] Assume everything is the same as Question 2 of Assignment 2, but not the representative.

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Extra Question for Assignment 2. [10% in final grade] Assume everything is the same as Question 2 of Assignment 2, but not the representative. firm takes labor as production input in the future period. That is, the future period. production function is now Y=KL-a Formalize the firm's optimization problem. What are the optimality conditions? Describe how the firm chooses K' and N' as rigorously as you can. Can you pin down the level of K' and N' respectively? What does the set of optimality conditions imply about the equilibrium prices? How does a decrease in w' affect the firm's optimal investment decision?

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