Question

. Let the production function be Y=AL^1/2*K^1/2 where Y is output, K is capital, L is...

. 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?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

If you are satisfied with a answer plz upvote thank you

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assume that the production function in an economy is given by y=k1/2, where y and k...
Assume that the production function in an economy is given by y=k1/2, where y and k are the per-worker levels of output and capital, respectively. The savings rate is given by s=0.2 and the rate of depreciation is 0.05. What is the optimal savings rate to achieve the golden-rule steady state level of k?
The production function is Y=K0.5L0.5 where K is capital, L is labor and Y is output....
The production function is Y=K0.5L0.5 where K is capital, L is labor and Y is output. The price of L is 1 and the price of K is 2. a) Find the optimal levels of K and L that should be employed to produce 100 units of output. What is the cost of producing this level of output? b) Will the optimal capital-labor ratio change if the price of labor goes up to 2 and the price of K goes...
Solow Growth Model Question: Consider an economy where output (Y) is produced according to function Y=F(K,L)....
Solow Growth Model Question: Consider an economy where output (Y) is produced according to function Y=F(K,L). L is number of workers and Y is the capital stock. Production function F(K,L) has constant returns to scale and diminishing marginal returns to capital and labor individually. Economy works under assumption that technology is constant over time. The economy is in the steady-state capital per worker. Draw graph. Next scenario is that the rate of depreciation of capital increases due to climate change...
Consider the production function Y = F (K, L) = Ka * L1-a, where 0 <...
Consider the production function Y = F (K, L) = Ka * L1-a, where 0 < α < 1. The national saving rate is s, the labor force grows at a rate n, and capital depreciates at rate δ. (a) Show that F has constant returns to scale. (b) What is the per-worker production function, y = f(k)? (c) Solve for the steady-state level of capital per worker (in terms of the parameters of the model). (d) Solve for the...
Consider the following Cobb-Douglass production function?≡??(?,?):?=??1/3?2/3 where Y is output, the constant z measures productivity, K...
Consider the following Cobb-Douglass production function?≡??(?,?):?=??1/3?2/3 where Y is output, the constant z measures productivity, K is physical capital, and N is labor. Suppose ?=2, ?=0.16, ?=0.06, and ?=0.02. a. What are the steady-state (numerical) values of ?, ?, and ?? b. What is the golden-rule (numerical) level of capital per worker? c. If the government wants to achieve the golden rule level of k, should savings increase, decrease or remain unchanged? Solve for/obtain its (numerical) value. Explain briefly.
17. Solow growth The production function in your country is: Y = K^0.5(LE)^0.5. Your economy saves...
17. Solow growth The production function in your country is: Y = K^0.5(LE)^0.5. Your economy saves 24% of output each period, and 5% of the capital stock depreciates each period. The population grows 2% annually. Technology grows 1% annually. You begin with 1000 workers and 1 unit of capital, and a tech- nology level equal to 1. a) Write the production function in per-eective-worker terms, so that per-effective-worker output (y = Y/LE ) is a function of per-effective-worker capital (k=...
A firm produces output (y), using capital (K) and labor (L). The per-unit price of capital...
A firm produces output (y), using capital (K) and labor (L). The per-unit price of capital is r, and the per-unit price of labor is w. The firm’s production function is given by, y=Af(L,K), where A > 0 is a parameter reflecting the firm’s efficiency. (a) Let p denote the price of output. In the short run, the level of capital is fixed at K. Assume that the marginal product of labor is diminishing. Using comparative statics analysis, show that...
A country is described by the Solow model with a production function of y=k^(1/2). Suppose that...
A country is described by the Solow model with a production function of y=k^(1/2). Suppose that k is equal to 400. The fraction of output invested is 50%. The depreciation rate is 5%. a. How does k change at this level? b. What is the steady state level of k? c. Suppose the level of k is 900. How does this change affect the rate of change of k to the steady state?
Question 1 Production is given by: ? 1−? ?≡?(?,?)=?? ? where ??+1 = (1 + ?)??...
Question 1 Production is given by: ? 1−? ?≡?(?,?)=?? ? where ??+1 = (1 + ?)?? and ??(0,1) Show that F exhibits a constant return to scale technology. Express output as a function of the capital labor ratio ?? = ?? ∕ ??. Find the dynamical system (describing the evolution of ?? over time) under the assumption that the saving rate is ? ?(0,1) and the depreciation rate is ? ∈ (0,1]. What is the growth rate of ??, ???≡(??+1...
Suppose that the economy’s production function is given by Y = K1/3N2/3 and that both, the...
Suppose that the economy’s production function is given by Y = K1/3N2/3 and that both, the savings rate s and the depreciation rate δ are equal to 0.10. a. What is the steady-state level of capital per worker? b. What is the steady-state level of output per worker? Suppose that the economy is in steady state and that, in period t the depreciation rate increases permanently from 0.10 to 0.20. c. What will be the new steady-state levels of capital...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT