Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help with this question. mainly g -h but you need to do them all 1. An economy produces with the production function Y
I need help with this question. mainly g -h but you need to do them all
1. An economy produces with the production function Y = 10K/2L.Y2. There is no population growth or technological progress. The depreciation rate is 10% and the saving rate is 60% : Q. @ o Show that the production function is constant returns to scale. Show that the function can be written y = 10k!/2 where y = % and k= % Assume k; = 3025. Find ki1, ktyo, and kiis Now assume k; = 4225. Again find ki1, k42, and ki3 Based on your answers above, without directly solving for the steady state, provide a range that the steady state of capital must fall within. Find the exact steady state capital per worker. Also find output per worker and consumption per worker at the steady state. Find the steady state capital per worker that maximizes consumption. What saving rate does this correspond to? What is consumption at this level? . Assume the economy starts in the steady state corresponding to s = 0.6. If it adjusts its savings to the optimal level (i.e. the level that maximizes consumption in the steady state), what is consumption per worker immediately after the change in savings (i.e. before capital changes)? Draw a graph of consumption per worker over time as it adjusts to the new steady state. . Thanos snaps his fingers and half the labor force disappears. Draw a graph of output per worker and total output over time (Hint: does the steady state level of capital per worker change? What about the level of capital per worker right after the change?)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started