Justify your answers for full credit. Throughout the assignment, adopt the notation I have used in lectures. 1. Suppose there is an economy with one household who cares only about consumption of a final good (clocks) and leisure. The household has h - 100. The household's preferences over consumption of clocks and leisure is given by the following utility function: (C,!) - 20 +500 In(8). There is a single firm which makes clocks. The firm uses household labour and a fixed amount of capital equal to K - 16 to produce clocks. The production function for producing clocks is given by Y - = (NO) ( 1). Here = randomaly fluctuates between zz - 12 and zy - 15. You will need to use the quadratic formula for this question. (1.A.) (35 points) Complete the first two columns of Table I for the two values that a can take. Use your answers to determine the qualitative predictions of this economy regarding the cyclical properties (procyclical, countercyclical, or acyclical) of consumption, real wages, labour hours, average labour pro- ductivity, and profits when there are technology shocks. Provide economic intuition to explain each of these cyclical properties. Table 1: Aggregate Variables Without Government With Government #= =12 2= = = 15 Variable Column 1 Column 2 Column 3 N. LP=YUN Household Utility 2656.62