Question 1 Suppose the production mction is given by Y = K \"N 1'\

Question 1 Suppose the production function is given by Y = Ka Nia, where Y is output; K is capital stock and N is Labor (look Appendix in Chapter 16). a. b. c. d. e. f. g. h. Is this production function characterized by constant return to scale? How? Show the work. Write this production function as a relationship between output per worker and capital per worker. If saving (S) equals investment (I), and S = sY, where s is saving rate, what is the corresponding investment per worker equation? Write down the dynamic capital accumulation equation per worker. For saving rate (s) and a depreciation rate (6), given an expression for capital per worker in the steady state in terms of s and 6. Show the steady state equilibrium in the diagram. What is the equation for output per worker in the steady state? Solve the steady state level of output per worker when a = 0.5 s = O. 10 and = O. 10. If saving rate doubles (s = 0.20), what happens to the steady state level of output per worker? Show this equilibrium in (h) and (j) in the diagram.