Cobb-Douglas functions with constant returns to scale can be used to model A technological change that increases aggregate productivity B skill-biased technological change C no technological change at all. D sector-biased technological change
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Cobb-Douglas functions with constant returns to scale can be used to model
A technological change that increases aggregate productivity
B skill-biased technological change
C no technological change at all.
D sector-biased technological change
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Solved in 2 steps
- 1. For each of the following production functions, determine if the tech- nology exhibits increasing, decreasing, or constant returns to scale. a. f(L;K)=L+Kb. f(L;K)=pL+pKc. f(L:K)=LK+L+Kd. f(L;K)=pKL+L+KSuppose the production function is Y = AK0.3N0.7. Suppose in 2010, K = 1000, N = 100, and Y = 199.5. In 2020, capital, labor, and output have doubled, so K = 2000, N = 200, and Y = 399. (a.) By what percentage did productivity grow from 2010 to 2020? (b.) If output had risen to 798 instead of 399, and capital and labor doubled, by what percentage would productivity have grown from 2010 to 2020?Zagreb International Review of Economics & Business, Vol. 10, No. 1, pp. 33-66, 2007© 2007 Economics Faculty ZagrebAll rights reserved. Printed in CroatiaISSN 1331-5609; UDC: 33+65Outsourcing to China: Opportunities, Threats, and StrategicFitIlan Alon*Theodore T. Herbert**J. Mark Munoz***Abstract: China is a prominent outsourcing destination in Asia. International labour outsourcing,specially in the IT sector, has grown rapidly in recent years. This article defines outsourcingthrough an extensive review of the literature and discusses the opportunities and challengesfor outsourcing to China. Seeking strategic âfitâ among the disparate elements that influencethe firmâs outsourcing decision is recommended. The authors explore the IT and businesslandscapes in China and propose strategies for outsourcing success there.Keywords: labour outsourcing, China, information technology, international business,…
- define the terms -Infaltion -depression -peakAssume that we have a Cobb-Douglas type aggregate production function in the form: Y=W.Kr.L1-r where : W=technology and r is standard share parameter of Cobb-Douglas production function. b. Why does (or does not) technology affects MRTS? Explain. c. Find output per effective labor; capital per effective labor (y=Y/WL and k= K/WL ). d. Find elasticity of substitution between K and L. Why does (or does not) the result different from previous question (Question-1) (Y=Ka.Lb) ? (Question 1: Assume that we have a Cobb-Douglas type aggregate production function in the form: Y=Ka.Lb )3 Assume a closed economy, perfectly elastic labor supply, and linear technology. Suppose the incremental capital-output ratio (ICOR) is 3, the depreciation rate is 3%, and the gross savings rate is 10%. Use the Harrod-Domar growth equation to determine the rate of growth. What would the gross savings rate have to be to achieve 5% growth? Assuming a perfectly elastic labour supply, state one criticism of this model from an exogenous growth theory viewpoint and another criticism of this model from an endogenous growth theory viewpoint.
- The price of crude oil during the period 2000-2010 can be approximated by P(t) = 6t + 18 dollars per barrel (0 ≤ t ≤ 10) in year t, where t = 0 represents 2000. Saudi Arabia's crude oil production over the same period can be approximated by Q(t) = −0.036t2 + 0.62t + 8 million barrels per day (0 ≤ t ≤ 10). † Use these models to estimate Saudi Arabia's daily oil revenue and also its rate of change in 2008. (Round your answers to the nearest $1 million.) daily oil revenue $ million rate of change in 2008 $ million/yrA country produces output using a production function: Y = F(K, L) = AxK0.5 L0.5 where L is labour, K is capital and A is total factor productivity. Prove that this function exhibits constant returns to scale. Assume that A = 3 and its growth rate is zero. The country has a population growth of 1.5% per year (0.015) and capital depreciates at a rate of 10% (0.10) per year. If the country saves 30% (0.3) of national income, find the steady state levels of capital per worker, as well as consumption and income per worker in the Solow growth model corresponding to this country. What would be the rate of growth of GDP per capita in steady state? Calculate the “Golden Rule” level of capital stock in steady state. Is this economy dynamically efficient?For IS-PC-MR, three equation model, what are the the most crucial economic indicators of interested in this framework? Explain how increasing unemployment benefits would affect the labour market in this model
- Country A and country B both have the production function Y = F(K, L) = K1/3L2/3 Does this production function have constant returns to scale? Explain. Find Solow’s production function, y = f (k)? Assume that neither country experiences population growth or technological progress and that 20 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 30 percent of output each year. 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. Suppose that both countries start off with a capital stock per worker of 2. What are the levels of income per worker and consumption per worker? Remembering that the change in the capital stock is investment less depreciation, use a calculator (or, better yet, a computer spreadsheet) to show how the capital stock per worker will evolve over time in both countries. For…I have worked on 1-3, but am stuck on 4-6, could you please assist? Suppose that the economy is summarized by the following: Technology (Production Function): Yt = 10 (Kt)0.3 (Lte)0.7 Consumption function: Ct = 0.8Yt Depreciation rate: 8% (i.e. δ= 0.08) Population growth: 2% (i.e. n = 0.02) Technological growth: 4% (i.e. g = 0.04) QUESTIONS: Find the steady state (long run) equilibrium values of kte, yet, and cet. Show graphically what would be the effect of a increase of the saving rate to s=0.4? Show graphically what would be the effect of an increase in population growth to 0.04? Assuming that in 2013 the US economy is in the steady state and L2013 = Le2013 = 8, what is the value of ke2014, ye2014, ce2014 , k2014, y2014, and c2014 ? Use your answer to e) to calculate the growth rate of ket, yet, cet , kt, yt, and ct Based on your answers to the previous questions and on your knowledge of how the Solow growth model works, explain what policies should a less-developed country…Assume that we have a Cobb-Douglas type aggregate production function in the form: Y=W.Kr.L1-r where : W=technology and r is standard share parameter of Cobb-Douglas production function. a. Find Marginal Rate of Technical Substitution (MRTS) between K and L. b. Why does (or does not) technology affects MRTS? Explain. c. Find output per effective labor; capital per effective labor (y=Y/WL and k= K/WL ). d. Find elasticity of substitution between K and L. Why does (or does not) the result different from previous question (Question-1) (Y=Ka.Lb) ?