Reference no: EM13688679
The Agricultural Household Model
A. First write down the assumptions and state the utility maximization problem for a single-member household that is agriculturally productive but has no access to labor markets. Assume the household derives utility from consumption of a good c and leisure l, and that it produces good c with production function c = F(L,A).
B. Solve the first order conditions to show the relationship between the marginal rate of transformation and the marginal rate of substitution. Why should these two rates equate for a utility maximizing household in equilibrium?
C. Now write down the assumptions and state the utility maximization problem for a simplified version of the complete markets AHM where there is only one household member and one complete market, in labor.
D. Derive the full income constraint. What does it simply must be true of the household in equilibrium? Derive and state the separation property. What does it simply must be true of the household in equilibrium?
E. Graph the equilibrium assuming that the household is a net hirer of labor.
F. Assuming household's production function has not changed, is the household better or worse off than when the labor market did not exist? How do you know?
G. Assume that the wage for agricultural labor decreases. Graph the equilibrium assuming that the household is a net hirer of labor. Can you say whether the household is better or worse off than in part e?
All the right-to-work state is in the south
: All the right-to-work state is in the south? Almost all right-to-work states are in the North and West. Nearly half states have right-to-work laws. Right-to-work laws have made union organizing much easier
|
Is labor-abundant and land scarce
: What is meant by the statement that China “is labor-abundant and land scarce.”? What affect does that fact on China’s willingness to trade?
|
International trade theory
: Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..
|
The agricultural household model
: First write down the assumptions and state the utility maximization problem for a single-member household that is agriculturally productive but has no access to labor markets.
|
Optimal basket of food and clothing that bob purchases
: Bob has an income I = $1000 to spend on clothing and food. Letting y represent the number of units of food and x represent the number of units of clothing that he purchases, his utility function is given by:
|
The lower the future value of an investtment
: Holding all else constant, the lower the future value of an investtment: Consider an investment returning $1400 half of the time and $700 half of the time. The expected value is: Suppose the risk on foreign government bonds RISES relative to US Treas..
|
Social cost-private cost-private value-social value
: A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x,
|
Would this system be democratic
: How can we retain the advantages of democratic government but reduce the problems caused by prisoners' dilemmas? Here is a radical proposal for reflection and discussion. Abolish all congressional staff. Create a one-house legislatures with 600 membe..
|