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Unformatted text preview: graph of the labor market and some discussion. 3. The analysis of production has many microeconomic aspects that are aggregated for macroeconomic analyses. a. Describe the profit maximization decision of the firm concerning capital inputs b. Describe the profit maximization decision of a firm to hire labor hours . c. Using the following production function: Y = F(K,L) = AK 0.4 N 0.6 find the optimal capital-labor ratio for the macroeconomy. 4. The interest rate has four definitions in this class. a. State and explain all four definitions b. Explain how the interest rate acts as a measure of time preference concerning consumption versus saving. 5. Do problem the problems from the book shown below. a. Numerical Problem #6 in Chapter 2, page 58 b. Numerical Problem #7 in Chapter 3, page 106...
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- Fall '07