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# set2 - Name SID Discussion Section Problem Set#2 Due...

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Name: _______________________ SID: _______________________ Discussion Section: _______________________ Problem Set #2 Due Tuesday, February 19, 2008 Problem Sets MUST be word-processed except for graphs and equations. When drawing diagrams, the following rules apply: 1. Completely , clearly and accurately label all axis, lines, curves, and equilibrium points. 2. The original diagram and any equilibrium points MUST be drawn in black or pencil. 3. The first change in any variable, curve, or line and any new equilibrium points MUST be drawn in red. 4. The second change in any variable, curve, or line and any new equilibrium points MUST be drawn in blue. 5. The third change in any variable, curve, or line and any new equilibrium points MUST be drawn in green. Problem Set #2 (Spring 2008) 1/4

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QUESTIONS A. Multiple Choice Questions . Circle the letter corresponding to the best answer. (1 points each.) 1. Over the past year, productivity grew 2.0%, the capital stock grew 1.0%, and labor grew 1.0%. If the elasticities of output with respect to capital and labor are 0.2 and 0.8, respectively, how much did output grow? a. 1.0% b. 2.0% c. 3.0% d. 4.0% 2. If capital and labor each grow by 5.0% in a year, the elasticities of output with respect to capital and labor sum to one, and productivity grows 2.0% in the year, by how much does output grow during the year?
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set2 - Name SID Discussion Section Problem Set#2 Due...

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