Table 21. 2 Data from Southton Price Price Quantity Quantity ( dollars ) ( dollars ) ( number ) ( number ) Item Base Current Base Current* Rubber…
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4. More on the Intertemporal Elasticity of Substitution. Suppose that the individual’a lifetime utility is given by: u = u(c) + 515(6) where again
September 3, 2020

.Refer to Figure 22.3.1. In the above figure the country of Kemper is currently on the aggregate production function given by the line W-X. If in the country of Kemper the aggregate production function shifted to the line given by Y-Z, what would this shift represent and what factors would cause this shift occur? What impact would this shift have on labour demand and real wages? Fully explain your answer.

Real GDP (billions of 2002 dollars)WLabour (billions of hours per year)Figure 22.3.17) Refer to Figure 22.3.1. In the above figure the country of Kemper is currently on the aggregate production functiongiven by the line W-X. If in the country of Kemper the aggregate production function shifted to the line given by Y-Z,what would this shift represent and what fat factors would cause this shift occur? What impact would this shift have onlabour demand and real wages? Fully explain your answer. (4 Marks)

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