Hi, can you finish my economics assignment for me? it is intermediate economics. I have attached a file to you.?
Econ 100C: Intermediate Economics III
Spring 2015: Jenkins
Due: Thursday, April 7, 2015
Instructions: You may work with your colleagues, but you must submit your own assignment to receive credit. The assignment is due at the beginning of the class on the the due
date for the assignment. Late assignments will be subject to the grading penalty described on
the course syllabus. You may make arrangements with your TA to submit your assignment
early if necessary.
1. Factor prices and income. An economy produces output using a Cobb-Douglas
= AK ? L1??
Suppose that the supply of each factor is perfectly inelastic:
K = K
L = L
Answer the following:
(a) Write down an equation that correctly expresses the real wage W/P in terms of
A, ?, L, and K when the market for labor is in equilibrium.
(b) De?ne two things:
income paid to labor ?
income paid to labor
labor share of income ?
Show that in the model, the labor share of income is constant and equal to 1 ? ?.
2. The labor share of income in the US. Figure 3-5 on page 61 of your textbook
contains a plot of the labor share of income for the US. For this problem, you will
construct a similar ?gure using data from FRED. FRED is a repository of economic
data. For more information about FRED, consult the Introduction to FRED document
on the course website and/or ask your TA or course instructor.
Download the following data from FRED:
? National income (A032RC1A027NBEA):
? National income: Compensation of employees (A033RC1A027NBEA):
Be sure that the data frequency is annual and that the date range is from January 1,
1947 to the most recent observations available.
(a) Use the data that you?ve obtained to create a measure of the labor share of total
income by dividing employee compensation by national income for each year.
Answer the following:
i. What is the average share of income paid to labor?
ii. In which year did labor receive the highest share of income? What was the
iii. In which year did labor receive the lowest share of income? What was the
(b) Replicate ?gure 3-5 from Mankiw by plotting the labor share of income for the US
with the y-axis ranging from 0 to 1. Make sure that your plot is clearly labeled.
(c) Now, plot the labor share of income for the US with the y-axis ranging from 0.58
to 0.68. Make sure that your plot is clearly labeled.
(d) Mankiw uses his plot of the labor share of income to argue that the labor share
of income in the US is approximately constant over time. Based on your work
above, do you agree with him? Why or why not?
3. US production. Download a ?le called US_Production_A_Data.csv by visiting:
and following the link to ?Annual US production data (levels)?. The data ?le contains
annual data on the capital stock, the labor supply, and real GDP for the United States
from 1948. Use a computer program such as Microsoft Excel, Numbers for Mac, or
Google Spreadsheet to do the following.
(a) Assuming that ? = 0.35, compute numerical values for total factor productivity
A, the marginal product of labor M P L, and the marginal product of capital
M P K for the US from 1948.
(b) What are the numerical values for total factor productivity in 1954, 1984, 2004,
(c) Plot total factor productivity. Make sure that your graph is titled clearly. In
general, what has been happening to total factor productivity since 1948?
(d) Plot the marginal product of labor M P L. Make sure that your graph is titled
clearly. In general, what has been happening to the marginal product of labor
(e) Plot the marginal product of capital M P K. Make sure that your graph is titled
clearly. In general, what has been happening to the marginal product of capital