ProblemSet1 - Department of Economics University of...

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Department of Economics Fall 2011 University of California, Berkeley Econ 182 1 Problem Set 1 Due on Thursday, September 8, in lecture. Please, write your full name , GSI , and section number on your problem set. Problem 1 Suppose a country named “Nuts” produces 500 jars of peanut butter per year. Of the 500 jars, households consume 200 jars and invest 15. The government consumes 60 jars. In addition to peanut butter, Nuts residents also like crackers and bread. They can exchange peanut butter for crackers at a price of 5 jars per cracker package, and exchange peanut butter for bread loaf at a price of 3 jars per loaf. At these prices, they consume 100 cracker packages and 10 loaves per year. a. What is the national income of Nuts? b. What is the domestic national spending expressed in peanut butter jars? c. How many jars of peanut butter must Nuts export to maintain the National Income Identity? d.
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ProblemSet1 - Department of Economics University of...

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