1. Country A and country B both have the production function

Y= F(K, L) = K^1/2L^1/2.

A. Does this production function have constant returns to scale? Explain.

B. What is the per-worker production function, y= f(k)? Hint, do not overthink this one, just use algebraic manipulation.

C. Assume that neither country experiences population growth nor technological progress 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, find the steady-state level of capital per worker for each country. Then find the steady-state levels of income per worker and consumption per worker.