Consider an economy described by the production function: Y = F(K, EL) = 3K1/3(EL)2/3.

a)Find the steady-state capital per effective worker and output per effective worker if the depreciation rate is 7%, the population growth rate is 5%, the growth rate of efficiency of

worker is 3%, and the saving rate is 20%. (4 points)

b)Redo part (a) if the production function becomes Y = F(K, EL) = 12K1/3(EL)2/3. (2 points)

c)Explain your results in parts (a) and (b) in words and an appropriate diagram (4 points).

how to do part c?