University of Minnesota
Department of Economics
Summer 2012
Econ 3102: Intermediate Macroeconomics
Handout 3
This handout formalizes some of the ideas in chapter 10 of Williamsons book. I advise a reading of the
book before going through it. As in slides,
PROBLEM SET 2
ECON 3102 Intermediate Macroeconomics
Ignacio P. Campomanes
Due Date: Oct. 21 (in class)
1
Competitive Equilibrium with Distortive Taxes (40 points)
Consider a simple one-period, closed economy model where the representative consumer has uti
MIDTERM Answer Key
ECON 3102 Intermediate Macroeconomics
1
Multiple Choice Questions (30 points)
1. If variable X is a lagging variable with respect to real GDP, then:
(a) Variable X can help in predicting the future path of real GDP.
(b) Real GDP can hel
PROBLEM SET 1
ECON 3102 Intermediate Macroeconomics
Ignacio P. Campomanes
Due Date: October 5, at 1:00 p.m.
1
Consumers Problem (30 points)
Consider a representative consumer with the following utility function:
u(c, l) = ln c + ln l
(1)
His budget constr
EXTRA PROBLEM SET
ECON 3102 Intermediate Macroeconomics
Ignacio P. Campomanes
Due Date: Monday Nov. 16 (in class)
This problem set is voluntary, you will not lose any points in your grade if you do not do it. Anyhow, I
encourage all of you who had a low g
PROBLEM SET 2
ECON 3102 Intermediate Macroeconomics
Ignacio P. Campomanes
Due Date: Oct. 21 (in class)
1
Competitive Equilibrium with Distortive Taxes (40 points)
Consider a simple one-period, closed economy model where the representative consumer has uti
PRACTICE PROBLEMS
ECON 3102 Intermediate Macroeconomics
Ignacio P. Campomanes
1
Social Security Taxes
Consider a simple one-period, closed economy model where the representative consumer has utility function
1 1
u(C, l) = C 2 l 2 and h available hours to
ECON 3102: Problem Set
4
Due by Dec 10, 2015 on class
Instructor: Canhui Hong
Dec 1, 2015
1
Firm's Problem (60pts)
Consider a rm whose objective is to maximize its two period present-value prots
+
0
1+r
Suppose the rm produces output Y and Y 0 using a tec
ECON 3102: Problem Set 1
Due by Oct 1, 2015 on class
Instructor: Canhui Hong
Sep 22, 2015
1
Utility functions (60 pts)
Consider the following utility functions which are widespreadly used in macroeconomic models
(a) :
u (c, l)
= log c + (1 ) log l
(b) :
u
ECON 3102: Solutions to Problem Set 2
Instructor: Canhui Hong
Oct 15, 2015
1
Firm's Problem (35 pts)
Consider a rm whose objective is to maximize prots, . Prots are denoted as the dierence
between
1
revenues and expenditures. Suppose the rm produces outpu
ECON 3102: Problem Set 3
Answer Key
Instructor: Canhui Hong
Nov 4, 2015
1 A Two-Periods Consumer's Problem (40pts)
Consider a two-periods (current and future period) model such that the consumer's preference is
U (c, c0 ) = u (c) + u (c0 ) = ln c + ln c0
EXTRA PROBLEM SET Answer Key
ECON 3102 Intermediate Macroeconomics
Ignacio P. Campomanes
1
Competitive Equilibrum and Taxes on Profits (40 points)
Consider a simple one-period, closed economy model where the representative consumer has utility function
1