Question
Assume that a country's production function is Y = K 1/2 L 1/2 . 1) What is the per-worker production function y = f(k) ?
Assume that a country's production function is Y = K1/2L1/2.
1) What is the per-worker production function y = f(k)?
2)Assume the country possesses 810,000 units of capital and 360,000 units of labor. What is Y? What is the labor productivity computed from the per worker production function?
3)Assume that 5 percent of the capital depreciates each year. What gross saving rate is necessary to make the given capital-labor ratio the same as the steady state capital-labor ratio?
4)If the saving rate equals the steady state level, what is consumption per worker?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started