3. For Spain, the following capital stock input K and labor input N were reported for the following four years:

The stock input and labor input numbers have been rounded off. Suppose that Spain’s production function is Y = 15K0.3N0.7, where Y is total output.

a. Find total output, the capital–labor ratio, and output per worker in each year. Comment on the results. Can this production function be written in per-worker form? If so, write algebraically the perworker form of the production function.

b. Repeat Part

(a) but assume now that the production function is Y = 15K0.5N0.5.

Transcribed Image Text:

Year K (billion N (million euros) persons) 2000 2000 15.5 2005 3000 19.2 2010 4500 18.7 2015 5500 17.8