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An economy has at its disposal two possible technologies yA = 2kA *; ys = 6kg* . Where y is output per worker and k
An economy has at its disposal two possible technologies yA = 2kA *; ys = 6kg* . Where y is output per worker and k is capital per worker. Access to technology A has no cost, while using technology B implies paying 20 once. Assume the saving rate is 0.25, labor grows at 0.02, and capital depreciates at 0.03. Answer the following: a) At what level of capital per worker should you pay to have access to technology B? b) Calculate the capital, output, and consumption per worker of the stationary equilibrium if you use technology A. What are their values if you use technology B? c) If the initial capital per worker is 5, what will be the stationary equilibrium of this economy? What if the initial capital was 70
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