This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: < ² < 1 . Problem 3 Derive demand function of intermediate good from the &nal good producing &rm problem. There are continuum of monopolists in intermediate good sector and each &rm has CobbDouglas production technology that use labor and capital as inputs. Let the input price be ³ t and w t for capital and labor respectively. 1 Problem 4 Formulate the intermediate &rm±s problem and solve. (hint : take lagragian multiplier as industry wide, i.e. not &rm speci&c, so that the solution yields the symmetric equilibrium conditions for all intermediate &rm) Problem 5 What is the intermediate &rm±s pro&t? Problem 6 Write three equilbrium conditions from research sector. Problem 7 Summarize equilibrium conditions including aggregation(Depreciation rate of capital is & ) Problem 8 Solve Social Planner±s problem and compare Euler equation with Competitive Equilibrium Problem 9 Now suppose ± = 1 what happens to CE and SP? 2...
View
Full
Document
This note was uploaded on 05/13/2010 for the course ECON 110D taught by Professor Schmittgrohe during the Spring '08 term at Duke.
 Spring '08
 SchmittGrohe
 Macroeconomics, Utility

Click to edit the document details