. Let the production function be Y=AL^1/2*K^1/2 where Y is output, K is capital, L is labor and A represents the level of technology.
a. What happens to the marginal product of capital as the level of capital increases?
b. If L=100, A=5, the savings rate is 1/2 and the depreciation rate is 1/3, what will the steady-state levels of capital, output and consumption be?
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