1. Firm’s cost function shows the relationship between total cost (C) and output (Q). Derive the cost function by minimizing C = 2K + 10L subject to a production function of Q = K0.5L0.3. Does the average cost (AC) increase with output level? Show your work. Is the marginal cost (MC) greater than the average […]
What recommendation would you give policymakers to ensure sustained economic growth following the covid crisis?
Macroeconomics Part A [30%]Answer ONE questionQ1Solve for output-per-person in the basic Romer model. Critically assess the effect that technological advancement could have on the balanced growth path and provide the intuition for your results. Q2Consider the household problem in a benchmark two-period OLG framework. Using the following functional form for the utility function𝑈(𝑐ଵ௧, 𝑐ଶ௧ାଵ) = […]