# PS3 - Econ 3140 Fall 2009 Problem Set 3 Due Wednesday...

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Econ 3140 Fall 2009 Problem Set 3 Due Wednesday September 23 (on lecture time) 1. An economy X produces two goods: Computers and Bicycles. Consider the following data: Computers Year 1 Year 2 Bicycles Year 1 Year 2 Output 5 10 Output 200 250 Compute: (a) The Laspeyres quantity index, with base year (year 1) prices as weights (b) The Paasche quantity index, with current year (year 2) prices as weights (c) The chain weighted index which is the geometric mean of the other two. (d) The growth rate of the real GDP. 2. Suppose that Freedonia has GDP equal to 2000 million, the capital stock is 1700 million, and the number of employees equals 70 million. The production function is Y = AK 0 : 3 N 0 : 7 . Calculate total factor productivity of the economy. 3. Question Two from Abel et.al., Chapter 3, numerical problems 4. Suppose the marginal product of labor is MPN = 200 & 0 : 5 N where N is aggregate employment. The aggregate quantity of labor supplied is 300+8 w , where w is the real wage.

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## This note was uploaded on 10/10/2009 for the course ECON 3140 at Cornell.

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PS3 - Econ 3140 Fall 2009 Problem Set 3 Due Wednesday...

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