Answered step by step
Verified Expert Solution
Question
1 Approved Answer
let an economy be represented by the production function Y=AK1/2L1/2where Y is output, K is physical capital and L is labor. a. As capital increases,
let an economy be represented by the production function Y=AK1/2L1/2where Y is output, K is physical capital and L is labor.
a. As capital increases, the marginal product of capital. (Say "increases", "decreases," or "is constant.")
b. If A=4, K=100 and L=25 then Y=
c. Let's say part b is period 1.Also, let the savings rate be 1/2 and the depreciation rate be 1/4.In period 2, capital will be blank and output will be blank . (Capital is an integer.Round output to one decimal place. You will probably need a calculator......)
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