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Unformatted text preview: University of Minnesota Department of Economics Econ 3102: Intermediate Macroeconomics Problem Set 1 Problem sets in macro at Minnesota are like burritos at Chipotle when you feel you are about to pass out, you take a deep breath and keep working on it. And just like you go to Chipotle if you want a serious burrito, you go to Minnesota if you want to do serious macro. Barnette and Wiseman (2005) This problem set is due on Thursday, February 11, at the beginning of class. The maximum score is 100 points. Be sure to review the Syllabus for details about PS and their grading! Feel free to contact me via e-mail if you have specific questions about the PS. Note that some Exercises have several parts, and each part may conceal more than one task for you. Be sure to answer every question thoroughly for full credit! 1 Problems (65 points) Exercise 1 (10 points) Consider the utility function U ( C, ) = logC + (1- ) log . (a) Derive the marginal utility of consumption. Is it decreasing in C? (b) Derive the marginal utility of leisure. Is it decreasing in leisure?...
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This note was uploaded on 02/07/2011 for the course ECON 3102 taught by Professor Mingyi during the Spring '08 term at Minnesota.
- Spring '08