Econ 202
Assignment 2 - S. Mehmet Ozsoy
Spring 2017
Instructions.
Assignment is due Friday, February 24th. Please return me the hard copies of your solutions. You
can either bring it with you to classroom or drop it in the mailbox at my office.
1.
Suppose the production function of the economy is
Y
=
K1/4L3/4
, where K is the amount of land and L is
the amount of labor. The economy begins with 81 units of land and 64 units of labor. Use a calculator and
equations in the chapter to find a numerical answer to each of the following questions.
a) How much output does the economy produce?
b) What are the real wage and the real rental price of land?
c) If a plague kills half the population, what is the new level of output?
d) What is the new real wage and real rental price of land?
2. Where will unemployment rise next year? Create your own chart!
Please click on the following
link: Click click, ILO link here!
In the openning webpage you will see a chart titled “Where will unemployment rise next year?” You can
add/drop countries to/from the chart. In order to add a country to the chart you need to type the name of
the country to the section right below the chart (be careful, it is case sensitive.) Pick any two countries or
regions that you want to compare. Then save the chart, by clicking on the top right corner of the chart as in
the following screenshot.
The chart will provide the forecast of unemployment rates for 2017 and 2018 as well as the recent historical
numbers.
a) Please explain with one or two sentences why did you choose the countries or regions you added to the
chart. Why do you think this comparison is interesting?
b) What is the message of the chart you created?
1
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