. Explain the following questions.

Would appreciate if you could answer all the parts as it is one question with multiple parts!

Problem 1

Suppose the production function of an economy is given by Y = AK1/2L1/2. Suppose A=1, the savings rate in this economy is s with 1 > s > 0 and the capital depreciates at a rate of 6. Population growth rate is n.

a. Express the production function in per capita terms (write down the expression for income per

worker, y, in terms of capital per worker, k)

b. Write down the capital accumulation equation.

c.Draw this production function on a graph with k on the x-axis and y on the y-axis.

d. Draw the line for the total savings per worker on the graph.

e. Show the steady state level of k and y for this economy. What is the total savings and total consumption in the steady state (annotate on graph)

f. Suppose the saving's rate increases to s' > s. Show on the graph what happens to output per

worker and growth in the short run

g. Show the new steady state level for k and y. Explain in words how the economy gets to that steady state. What is the growth rate of y at the new steady state?

h. Now suppose the population growth rate increases to n' > n. Show the new steady state point for the economy. What happens to the growth rate in the short and long run when the population growth rate is higher? (You can draw a new graph to illustrate this part)

Now suppose the economy increases its productivity due to a technological innovation, i.e A increases to A? > 1

i. Draw the new production function. What happens to the steady state y and k. Explain how the

economy gets to the new steady state.

Given the following demand function for beef (Qd = 10 -P +Y) and supply function for beef (Qs = 5 + P), where Qa is the quantity demanded of beef, P is the price of beef, Qs is the quantity supplied of beef and Y is the consumer income. a) Construct equilibrium price and equilibrium quantity as functions of consumer's income. [10 marks] b) Use the information above to draw demand and supply curves and indicate equilibrium price and quantity given that the level of consumer's income is N$2. [10 marks] c) Mary, Martha and Johanna have different demand curves for popcorn. Mary's demand curve is P = 5-0.7Q; Martha' demand curve is Q = 20 - 2.5P; and Johanna's demand curve is P = 3 -Q. They are the only consumers of popcorn in the market. Draw Mary, Martha and Johanna and market demand curve. Be sure to identify any intercept values as well as any "kink" values in the graphs. [10 marks]5. Review on YouTube, The largest Dam in the World, https://www.youtube.com/watch?v=b8cCsUBYSkw Answer these questions: Marks: (1+1+1+2+3+1) a) It's called a renewable energy project. What does this mean? b) It is considered clean energy, because it does not produce CO2 directly. But is it environmentally friendly? c) What type of turbine would this dam use? Why? d) Dams prevent flooding, but this also causes environmental problems (example to agriculture, flooding of land, etc.?) Explain? e) Explain the terms: Penstock, Spillway, Reservoir, Intake, Tailrace, Draft Tube, Head, Flow Rate f) Why is the LCOE (Levelized Cost of Electricity) of these projects low