73240 Fall 2015
73240 Problem set 3 Answer Key
Due Friday Sep. 25th
Problem 1: A standard household utility maximization
problem
Suppose the representative household has the following utility function:
c1
U (c, l) =
+ ln l
1
where c is consumption, l is
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73240 Fall 2015
73240 Problem set 2 Answer Key
Problem 1: Calculating GDP and its Components
Variable
Amount
Gross National Product
200
Factor income received from rest of the world
3
Factor payments made to rest of the world
5
Current account balance

73240 Fall 2015
73240 Problem set 7
Due Friday Nov. 20th
Problem 1: Consumption Smoothing in the 2 Period
Model
In this problem, we consider a stylized version of the problem of the consumer in the 2 period
model. Assume aftertax income today and tomor
73240 Fall 2015
73240 Problem set 4
Due Friday Oct. 16th
From the Syllabus:
1. Homework must be turned in on the day it is due (usually on a Friday) in the undergraduate program o ce in Tepper 139 by 430pm sharp. Do NOT leave it under
my o ce door. Late
73240 Fall 2015
73240 Problem set 6
Due Friday Oct. 30th
Problem 1: Solow Growth Model
Consider the Solow model of growth. Suppose the economy is initially in a steady state and
that some of the nations capital stock is destroyed because of a natural di