In Wicksell’s system the theory of capital in which the natural rate of interest on ‘real capital’ is determined, provides the foundation for his monetary analysis. Critically discuss this statement.

Effort Investment Risk Farmer's ownership Fixed land rental Sharecropping Farmer E's production function is 20 x VI (Y is the final output, Lis labor input) Y = According to theory, E's effort will be the lowest under which ownership? ( you should be able to answer this question without calculation ) According to theory, E will be facing the lowest level of risk under which land ownership? Why? Assuming E is working under a fixed land rental contract, with a yearly rent of 50. His twin brother F, who has exactly the same production function, is working with a different landlord who charges 20% of the yearly revenue. • (calculation) What is farmer E's profit function? • (calculation) What is his brother F's objective function? • How is the optimal effort defined? (only explain the concept) • (calculation) How much labor would E invest in his land (He knows exactly how his profit function looks like ) ? How much profit could he make under optimal effort? Assume his twin brother F doesn't…

If the price of gold had not changed, what would have been the change in Glitter Gulch’s real output?

QUESTION 21 Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. Units of capital 80 60 A 0 E BD 60 80 120 Units of labor Figure 7.8 Refer to Figure 7.8. The slope of isocost CD is O greater than the slope of isocost AB. less than the slope of isocost AB. equal to the slope of isocost AB. indeterminate from this information, as the prices of capital and labor are not given.