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1) Hal's utility function is U(x,y)=2x+5y. The price of x is $4 and the price of y is $15. Hal has $200 a week to spend on x and y. Hal is offered a chance to join a club of consumers of good y. If he joins, he can get y at a price of $8. What is the most that Hal would be willing to pay to join the club?
2) Which of the following production functions exhibit constant marginal product of capital, K? In each case y is output and K and L are inputs.
a. y=K*L^2/3
b. y=3K^1/2*L^1/2
c. y=K^1/2+L^1/2
d. y=2K+3L
How much more output each year will have to be produced in the world
consider the following keynesian closed economy model.real money demand l 0.2y - 200rfull-employment equilibrium
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