Short test #8

November 10, 2021. 3:30 PM.

Instructions for online submission
Please, work out your answers to the following questions on separate sheet(s) of paper in
cursive handwriting and draw the necessary figures. After completion, scan or
photograph your test paper and submit it by sending your PDF or JPG file(s) to the
following email address by 5:00 PM today the very latest:
Galbacs.Peter@uni-bge.hu
with the subject ‘TEST 8 submission’.
Late submissions (i.e., arriving after 5:01 PM), submissions in files other than PDF or
JPG (DO NOT use a cloud service), and submissions via other channels (e.g. TEAMS,
COOSPACE, unannounced email addresses, etc.) will all be ignored.
I. Mathematical problems (5 points in sum)
The following spreadsheet contains some details of an agricultural production process. Labour
is the only variable input.
L q APL MPL
1 200
2 320
3 448
4 560
5 660
6 740
7 800
8 850
9 875

a) Find the average product and marginal product of labour at each level.
b) At what stage does diminishing returns emerge?
c) At what stage are marginal product and average product of labour equal?
II. Literature review (5 points in sum)
a) What are real business cycles?
b) What is the similarity and difference between Lucas’ theory and the RBC-approach?