A) Production Function : Constant Returns to a Scale

Suppose when L=50 and K=100, output Y=$1,000. How much will Ynew be if this company triples both inputs of production, i.e., Lnew=150 and Knew=300?

B) Growth Accounting Formula

Suppose real GDP grows by 7% this year and the amount of labor increases by 6%. If the rate of technological progress this year is 2%, then how much will the aggregate capital stock grow?

C) Growth Accounting Formula

If in a small economy both real GDP and capital grow by 9%, technological progress is 2%, by how much labor must have increased in this economy?