Kindly ,provide solutions to these questions.

Question 1: Fact I: Consider the following setup that follows the standard Solow model in Country A. There are N consumers, each endowed with one unit of available time. Consumers do not value leisure and they divide output between consumption and savings according to the following rule: a fraction s of output is saved, and the rest is consumed. There is a representative firm that has a Cobb- Douglas production technology of the form Y = zF(K,N), where K denotes capital, N denotes Labour, z is (Total Factor Productivity (TEP). Initially country A had 100 units of Capital, 144 units of labour and population growth rate was 0.01. Suppose you are given the fact that in this economy depreciation d is 0.09 and at steady state, the output per-capita could be expressed as y* = (k*15. Now, consider the unfortunate situation where a disease took several lives, reducing the number of labour force equal to 81 units. 1.1 Describe and explain changes/effect of this disease on country A's per-capita output, and per capita capital in the steady state, comparing these with the initial steady state that was prevailing before the disaster. (Note: you are supposed to describe and explain changes in detail, following Solow Model. The numbers are provided to give you more details about the economy, but you are not required to provide mathematical derivationsumbers for this question). 1.2 If you were illustrating the old and new steady state in a diagram, with per-capita capital in x-axis, describe how your graph would change before and after the disease. Would you expect the growth rate of output per worker in country A smaller or greater than it was before the disease? Question 2: Consider country B, where every citizen is identical (like clones of each other) and each individual has one unit of labour to supply. The country produces only one commodity, food. Current aggregate output of food, Y, is produced using current inputs of land, L. and current labour, N, that is Y = zF(L,N), where z is total factor productivity (TP). Future population is N", population grows at a rate n = 0.01, and depends on consumption per worker, c - C/N. There is no money; wage payment is provided solely in terms of foods. In equilibrium all foods produced in the economy are consumed and this is a closed economy without any government, net export or savings. Consider the Malthus model in the context of country B. Suppose the economy is currently at steady state. Now suppose considerable amount of land is destroyed due to an earthquake in country B. Describe and explain changes/effect of this incidence on steady state land per capita, and standard of living. Explain how wage would be determined in country B and how this process (of determining wage in Mathus model) is different compared to the competitive equilibrium models we studied in Chapter 4 and 5. Explain if you think wage would be higher or lower in country B after the earthquake. Question 3: Fact II. Assume the endogenous growth model (from Chapter 8) perfectly explain the growth situation in the country Econland, where a representative consumer starts the current period with H. units of human capital and does not use time for leisure. In each period, the consumer has one unit of time, which can be allocated between work and accumulating human capital. Let u denote the fraction of time devoted to working in each period. The consumer's quantity of human capital is the measure of the productivity of the consumer's time when he or she is working. For each efficiency unit of labour supplied, the consumer receives the current real wage w. The consumer cannot save, but they can trade off current consumption for future consumption by accumulating human capital. b is a parameter that captures the efficiency of the human capital accumulation technology, with b > 0. The representative firm produces output using only efficiency units of labour. The production function is given by Y -zuHe where He is the units of labour in production. Sunnose the economy of Ecoaland was initially in a steady state with H.= Has He In the bane of giving the economy a3.)When the Mumfords purchased their home on February 2, 2017, they set aside 300 square feet (out of a total of 2,400 square feet) of living space for Courtney's office. The Mumfords do not use the simplified method for computing the home office deduction. As of January 1, 2019, the home had an adjusted basis of $240,000 ($40,000 of which is attributable to the land) for purposes of line 37 of Form 8829. The fair market value of the property was $282,000. Relevant information concerning the residence for all of 2019 appears below. Homeowner's insurance.......$3,200 Repairs and maintenance.......1,800 Utilities...........6,200 Painting (office area only)...1,250 The cost of Courtney's office furniture and equipment was previously deducted under $ 179 in the years these assets were acquired. On June 29, 2019, she purchased a fireproof file cabinet for $800 to safeguard the blueprints of her structural designs and construction plans. Whenever possible, Courtney prefers to avoid depreciating capital expenditures over time. 4.)One of Courtney's clients was interested in building a shopping center on a tract of land she owned in Lincoln County. Courtney inherited the property from her uncle when he died on June 6, 1999. At that time, the land was valued at $40,000. It has since been rezoned for commercial use and has a current value of $200,000. On February 10, 2019, Courtney exchanged the Lincoln parcel for a similar tract in Minnehaha County worth $190,000 and cash of $10,000. 5.)On September 2, 2019, Courtney sold a tract of land in McCook County to a farmer who owned the adjoining property. The land was inherited from the same uncle who died in 1999 and was valued at $30,000 on June 6, 1999. Under the terms of the sale, Courtney received cash of $20,000 and a note receivable to be paid in four equal installments at 1-year intervals from the date of sale. Each note calls for the payment of $25,000 plus simple interest of 8%. To the extent allowed by law, Courtney wants to defer recognition of gain for as long as possible. 6.)In early 2018, Matthew learned that one of the restaurant's best servers, Mindy Smith, was suffering domestic abuse at the hands of her husband Billy. When Billy started to abuse their 5-year-old daughter as well, Mindy decided it was time to leave. Before they left on April 14, 2018, Matthew loaned Mindy $5,500 to help her relocate with her daughter. Matthew had her sign an interest-free note due in 1 year. Matthew never heard from Mindy again. In late 2019, Matthew learned that Billy tracked Mindy and their daughter down and killed both of them before committing suicide. Given these tragic circumstances, Matthew has no expectation that the loan will ever be repaid.1 Theory Questions (100%) 1. Consider an agent who lives for two periods. The agent has to units of income in the rst period and no income in the second period. The agent can save for the second period at the interest rate r. The agent's preferences are given by: 1 1 Cl 0' + 62 IT 1 cr 1 or Here, a > [J is a parameter and {J <: :3 is the subjective discount factor. agent faces two period budget constrains: c1 s="ml" and c2="(1" r here represents second assets savings. find optimal consumption savings decision of this agent. how do change with interest rate consider basic twcrperiod labor supply an that only works in rst period. let her be denoted by suppose time normalized to so has preferences over e given by: hence gets utility from leisure l times constraints: cl wage1 lending borrowing a tax pay. using prove interpret following relation words: arn="Udxn" axn-1 . obtain alternative expression for variance example b starting _ uk u2k y2="12" k="0," n .. on assume uniform distribution deaths each year age. simplify mixtiti ml use interpretation m-thly temporary life annuity-due pays per annum annuitant age x y years. a. express current payment form actuarial present value above annuity as sum payments first remaining b. term under assumption o within c. c d expressions recursion such indicate value. derive formulas show annuity-immediate analogue ax i da becomes am s7 a1 analogues are m>