The question is simple. Consider an economy with just one technique for production of each good: Good Food Cloth Labor per unit output 1 1 Land per unit output 2 1 Capital per unit output 0.8 0.9 Q1. There are 100 units of capital available. Write and draw the production possibility possiblity curve in this case. Label all the important points clearly.

Question What is the production efficient q? C(q)= 100q-4q^2+0.2q^3+450

Suppose in the economy of Apple Republic, the demand for money is given by Md = $Y (0.3 - i), where $Y = 100 and the supply of money (Ms) is $20. a. What is the equilibrium interest rate (i)? Answer: i = [ Select ] v %. b. If the central bank increases money supply (Ms) to $25, what is the impact on the interest rate? Answer: Interest rate (i) will [ Select ] to [ Select ] %.

Economic Growth Akila and her family are the only inhabitants of a small oasis in the middle of the desert. They grow various kinds of trees, which provide them with everything they need. Akila has built an irrigation system that improves the productivity of the land. Production makes use of three factors: capital K (the irrigation system), labour N (the work done by Akila and her family) and land L (the oasis and the desert around it). The production function is given by F(K,N,L)= K*N*L*. Labour supply is fixed at N=1 and the family owns 64 units of land, L=64. The irrigation system is in constant need of repair; about 10% needs to be rebuilt every year to keep it in a good condition, i.e. K' = K – K +1, where I is investment in the capital stock. 1. Show that for a saving rate s, the law of motion for the capital stock can be written in per-capita terms as k'=k-k+s2vk . 2. Find the steady-state level of the capital stock k, output y and consumption e as functions of s. 3. Currently,…