ECON 401A Hartman Autumn 2010 ANSWERS FOR PROBLEM SET II 1.a. 427555MYTGPand 811550550MrTGPIf Gincreases and T, M, and Pdo not change, then 10YGand 105rG. If G and T increase by the same amount with no change in M and P,then (/)0105dGdTdXd M PdYdXand (/)02050dGdTdXd M PdrdX. If M increases with no change in P, G, and T, then 205YMPand 1050rMP .1.b. *100Yand *15%r1.c. 25N1.d. The marginal product of labor is 2. 4W. Unemployment is 15. 1.e. 2.5298W. 2. 00'0(1)dTdGdPIYPLLMCIiY,0010(1)dTdGdPCrPLLMCIiY(/) 0(1)0(1)dTdGdXd M PLCYiLLXCIiY
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