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ECON-UA-12

DEPARTMENT OF ECONOMICS

INTERMEDIATE MACRO

SPRING 2026

Problem Set 1

Not graded; do not turn in

Answer the following for recitations on Friday. Recitation Problem Sets help you with Quiz and Exam questions. Answers will be posted on Brightspace after recitations.

A. Math Review:

1. The calculus.

2. Which of the production functions below have CRTS and diminishing marginal product of both capital (K) and labor (L)? Show your work. Note: Parts d and e are especially difficult.

a. Y = AK1/2 L1/2 where A > 0

b. Y = A(K + L) where A > 0

c. Y = A(K + L)2 where A > 0

d. Y = A(BK1/2 + BL1/2) 2 where A, B > 0

e. Y = A(BK2 + BL2 ) 1/2 where A, B > 0