Answer Happy

Q2 Equilibrium in the consumption-labor choice model 16 Points Recall that equilibrium in the static consumption-labor choice model is given by the following five equations: W Y = AKL1-a = QAK-1 [l-a = (1 - a) Að L-a R/P L = 174 4 Y = C = 1- [N-(*) = 1+ W IP Answer the following:
Q2.2 4 Points Suppose that y increases because households have developed a greater preference for leisure relative to consumption. Construct a pair of well-labeled diagrams of equilibrium in the factor markets to show how the change in @ affects the supply of capital, the supply of labor, the real wage, and the real rental rate. Upload an image of your answer as a jpeg, png, or pdf file. Please select file(s) Select file(s) Q2.3 1 Point When y increases: OY increases and C increases O Y increases and C decreases OY decreases and C increases OY decreases and C decreases
Q2.4 4 Points Suppose that A decreases. Construct a pair of well-labeled diagrams of equilibrium in the factor markets to show how the change in A affects the supply of capital, the supply of labor, the real wage, and the real rental rate. Upload an image of your answer as a jpeg, png, or pdf file. Please select file(s) Select file(s) Q2.5 1 Point When A increases: O Y increases and C increases O Y increases and C decreases OY decreases and C increases OY decreases and C decreases
Q2.6 4 Points Suppose that K doubles and A decreases by half. Construct a pair of well-labeled diagrams of equilibrium in the factor markets to show how the changes in A and K affect the supply of capital, the supply of labor, the real wage, and the real rental rate. Upload an image of your answer as a jpeg, png, or pdf file. Please select file(s) Select file(s) Save Answer Q2.7 1 Point When K doubles and A decreases by half: OY increases and C increases O Y increases and C decreases OY decreases and C increases O Y decreases and C decreases