In class, we defined the class of preferences that are quasilinear in one good (called numeraire). We also provided a utility function that represents these preferences. Find the class of preferences and a respective utility function that represents them where all the goods in the economy are numeraire (i.e.. the function is quasilinear in all goods). Please draw graphs as needed.

For this and the following three problems, consider a partial equilibrium model with two households with preferences given by u1(x1, m1) = 2 ln(x1 + 1/6) + m1 and u2(x2, m2) = 3 ln(x2+1/3)+m2, and two firms with cost functions for the production of good 1 given by c1(y1) = y 2 1 and c2(y2) = y 2 2 . Find the demand and supply function for good 1 of each household and the market demand and supply function for good 1, and illustrate each household demand and supply and the market demand and supply curves in a graphic. Please draw graphs as needed.

06 Question (6 points) Identify whether each of the following statements is more likely to come from a classical economist or a Keynesian economist. a. "Because employee wages aren't changing quickly. the economy is in for trouble." I" classical - Keynesian : b. \"Government intervention in the market will do more harm than good." classical Keynesian c. \"Consu mer spending is down. but that is good news because it means that savings is u p.\" classical Keynes ian d. \"In the long run, we are all dead." 1 Keynesian _ classical e. "There is no reason to believe that most prices will take more than several months to adjust in either direction." r classical Kevnesi a n Classical economists and Keynesian economists disagree about what the government should do when the economy experiences high levels of unemployment. A big difference between the two theories is that: Keynesian theory emphasizes correcting the economy on its own because of the three lags, while classical economic theory supports economic changes that benefit consumers of a country. Keynesians emphasize increases in total spending (aggregate demand), while classical economists emphasize increases in production (aggregate supply). All of the listed answers are differences between Keynesians and classical economists. Classical economists emphasize increases in short-term spending, while Keynesians support long-term savings.5. Keynesian cross and Keynesian multiplier, pt. 2: Suppose that households' marginal propensity to consume is 2/3. According to the Keynesian cross, what is the impact on equilibrium GDP of each of the following? (In each case, state the direction of the change and give a formula for the size of the impact, but you do not need to draw a diagram.) a) An increase in government purchases AG. b) An increase in taxes AT. c) Equal-sized increases in both government purchases and taxes, AG = AT.Q4. Describe the different views on monetary policy between Keynesians and Monetarists. Begin with the Keynesian view on how the money supply affects interest rates and goes on to affect aggregate demand through the effect of interest rates on investment demand. Contrast that with the Monetarist focus on a steady and predictable money supply. How is that said to promote growth