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Q1. Assume that both countries start off with a capital stock every worker of 2. Illustrate what are the levels of income every worker also consumption every worker at the initial period? Remembering that the change in the capital stock is investment less depreciation, utilize a calculator to elucidate how Elucidate how the capital stock every worker will evolve over time in both countries. For each year, compute income every worker also consumption every worker.
Q2. Converse the process of consumer's equilibrium under indifference curve approach
Teresa likes to consume chocolate and yogurt. Her utility function is given by U(x, y) = x0.5y0.5where x and y are the quantities of chocolate and yogurt she consumes. Suppose
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