Consider an economy of two-period-lived people in overlapping generations. Each person produces from labour y goods when young but nothing when old. The number of people born doubles every period. There is the following capital technology: if kt goods per young person are turned into capital at time t, the capital produces f(kt) goods at t + 1. The diminishing marginal product of capital is f(kt). After production takes place, d units of capital are lost to depreciation. However, the remaining units of capital can be consumed.

a.Find an equation that represents the set of feasible stationary allocations and

explain it in words.

b. Find the equation that describes the golden rule capital stock for this economy. (You may use either calculus or a marginal cost and marginal benefit analysis.)