Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 4, Problem 4E
(a)
To determine
Derive the five equation and five unknowns.
(b)
To determine
Solve the equations.
(c)
To determine
Determine the equilibrium level of output per person.
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Prof. Smith and Prof. Jones are going to produce a new textbook. The production function for the book is:
?=?1/2?1/2?= is the number of pages in the finished book?= is the number of working hours spent by Smith?= is the number of working hours spent by JonesSmith's labor is valued at 3 TL per working hour and Jones's labor is valued at 12 TL per working hour. After having spent 900 hours preparing the first draft, Smith cannot contribute any more to the book. Jones will revise the Smith's draft to complete the book.a) How many hours will Jones have to spend to produce a finished book of 300 pages?b) What is the marginal cost of the 300th page of the finished book?
The Cobb - Douglas production function is a classic model from economics used to model output as a function of capital
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s.t.
= 0 (b) Find the
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Consider an input-output model with 3 sectors. Sector 1 is heavy industry, sector 2 is light industry,
and sector 3 is agriculture. Suppose the input requirements are given by the following table:
Agriculture
Heavy Industry
0.1
Units of Heavy
Industry Goods
Units of Light Industry
Goods
Units of Agriculture
Industry Goods
a. Suppose the final demands for the three goods are 85, 95 and 20 units respectively. If x1, x2 and
x3 denote the number of units that have to be produced in the three sectors, write down the
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b. Verify that x1 = 150, x2 = 200 and x3 = 100 is the solution
0.3
Light Industry
0.2
0.2
0.2
0.2
15
0.1
0.2
0.1
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