Country A and country B both have the production function Y = F(K, L) = K1/2L1/2

a. (10 points) Does this production function have constant returns to scale? Explain.

b. (10 points) What is the per-worker production function, y = f(k)?

c. (30 points) Assume that neither country experiences population growth and that 5 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 20 percent of output each year. Using your answer from part (b) and the steady-state condition that investment equals depreciation,

(i) Find the steady-state level of capital per worker for each country.

(ii) Find the steady-state levels of income per worker and consumption per worker.

Note: Please upload your answers and calculations using an excel file.