Q1. Suppose that the government chooses conscription i.e. government services the representative consumer to supply units of time to the government as military service C with a lump-sum tax. With the help of a diagram show the effects of conscription on cumulative consumption, leisure, and services the real wage and aggregate output.
Q2. Do you think it is a good idea for the Russian government to take the measure of encouraging foreign carmakers to build factories in Russia instead of setting trade barriers as it did in 2002 to help relieve its carmakers from the challenges from the imported used cars? Why or why not?