Answer to Question #64577 in Macroeconomics for ver

Question

Hi can somebody solve this with solutions for me?

C=5000+0.4Yd
I=3000
G=8000
Net Taxes=7000
X=12000
M=10000
Yd=Y-T

Qns: Finding equlibrium level of income (Y)

Answer 1

If the output of the firm (call it y) increases as you increase x but at a diminishing rate, then y=100*exp(-x) wouldn't be a valid representation of this firm’s production function, because at x = 0, 1, 2 and 3 the output is y = 100, 36.78, 13.53 and 4.98 respectively, so according to this production function the output of the firm (y) decreases as you increase x.