Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Homework 1 - Solutions
1. Consider the following "Edgeworth-box" economy with two commodities (say apples
and bananas). There are two households (labeled 1 and 2). The preference
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 10: Uncertainty II
1. Consider a simple one-tree pure exchange economy. The only source of consumption is
the fruit that grows on the tree. This fruit is called divide
Professor: Oksana Leukhina
University of NC - Chapel Hill
Econ 720 - Macro Theory
Final Exam Answers
(120 pts)
Closed books/closed notes exam. You may use your calculator. Show all your work!
Question 1 (20 points)
Consider the neoclassical growth model w
ECON 721
Macroeconomic Theory
Professor: Oksana Leukhina
Department of Economics
UNC
Spring 2009
Advanced Macroeconomic Theory II
Lecture:
Professor:
Office hrs:
Recitation:
GA:
Class Website:
Tuesdays and Thursdays, 2 - 3:15, Gardner 307
Oksana Leukhina,
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 12: Overlapping Generations Models - SOLUTION
1. Consider an overlapping generations endowment economy with a single non-storable
good. Each generation is of measure 1
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 11: Simple Model with Uncertainty
1. Consider an economy that lasts for only one period. There are two consumers with
stochastic endowments of the single consumption g
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 9: Uncertainty
1. An economy consists of two innitely lived consumers named i = 1; 2. There is one
nonstorable consumption good. Consumer i consumes cit at time t/. Co
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 8: Ricardian Equivalence
1. Consider the following generation of agents. Each generation t lives for one period, has
endowment et and cares about the next generation,
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 7: NGM and Welfare Analysis
1. Consider the NGM model with taxes on consumption and capital income. Assume
Nt = 1 for all t. Also assume that there is no technological
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 6: Matlab and NGM
1. Consider the Neoclassical Growth Model. The consumer problem is:
max
1
X
t
[ln (ct ) + ln (1
ht )]
t=0
1
X
1
X
s
pt ct + kt+1
t=0
s
s
) kt + wt hs
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 6: Matlab and NGM
1. Consider the Neoclassical Growth Model. The consumer problem is:
max
1
X
t
[ln (ct ) + ln (1
ht )]
t=0
1
X
1
X
s
pt ct + kt+1
t=0
s
s
) kt + wt hs
Econ 721 - Macro II - Spring 2009
Prof. Oksana Leukhina
T.A. Fernando Chague
Recitation 5: Cake Problem
1. Consider a cake-eating problem. Suppose you are presented with a cake of size W0 .
At each point of time, t = 0; 1; 2; : you can eat some of the cak
Professor: Oksana Leukhina
RA: Fernando Chague
University of NC - Chapel Hill
Econ 721 - Macro Theory
Your Name .
ANSWERS to MIDTERM 2
This is a closed notes/books exam. Good luck.
Question 1 (35 points)
Consider the neoclassical growth model with no leis
Instructor: Oksana Leukhina
University of NC - Chapel Hill
Advanced Macro Theory II
MIDTERM1
Solution
Question 1 (30 points)
a. (5) State the functional equation (FE) formulation of the simple neoclassical growth model
studied in class.
v (k )
=
max fU (f