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A competitive equilibirum problem. A) Suppose that Cookie Monster's production function is given by zF (K, N d ) = z(K N d ) 1/2 with z = 16 and K =...

A competitive equilibirum problem.

A) Suppose that Cookie Monster's production function is given by

zF (K, Nd) = z(K Nd)1/2

with z = 16 and K = 1/16 .

Suppose also that w = 1. Write his profit maximization problem, find Nd* and compute the maximized profit

B) Suppose that Cookie Monster's utility function is given by

u(C, l) = C + 4(L + 2)1/2.

Given w and π∗ found in item h = 16 and G = 2,

Write his utility maximization problem, find his optimal consumption bundle, and compute the maximized utility level

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