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Show graphically on the same x and y axis what happens to this production function if there is a technological advancement in this economy.
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- Say that the average worker in the U.S. economy is eight times as productive as an average worker in Mexico. If the productivity of U.S. workers grows at 2 for 25 years and the productivity of Mexicos workers grows at 6 for 25 years, which country will have higher worker productivity at that point?An increase in labor productivity means businesses will produce more output with the same amount of labor. ExplainWhy does adding capital to a production function make the economy more productive? What are diminishing returns to capital? How does technology affect productivity and growth?
- In Wonderland production per worker (y) depends on capital per worker (3) such the y=10√k. Every year 15% of the capital stock depreciates, while workers in Wonderland save 10% of their income. Every year the population grows at as e of 3% a) How might Wonderland and Neverland achieve economic growth in the long run?Country Has Cobb-Douglas production function: Y(it) = A(it) x K(it)1/3L(it)2/3 Where: Y(it) = realGDP K(it) = Capital L(it) = No. workers employed in country (i) on date (t) Suppose multiple countries share the same alpha = 1/3 but different levels of totalfactorproductivity (A(it)). Now Instead of the above function the production function changes to: Y(it) = A(it) x K(it)1/3 x (H(it)L(it))2/3 Y(it) = realGDP K(it) = Capital H(it) = Average hours worked p/worker (This is so the labour input is total hours opposed to employment) L(it) = No. workers employed in country (i) on date (t) These multiple countries share the same alpha = 1/3 but different levels of totalfactorproductivity (A(it)). How does this new variable in the formula impact TFP growth? What happens if the country has higher average hours per worker? what happens if the country has lower average hours per worker?Please no written by hand and graph Consider a small world that consists of two different countries, a developed and a developing country. In both countries, assume that the production function takes the following form: Y = F (K, LE) = K¹/4 (LE) 3/4, where Y is output, K is capital stock, L is total employment and E is labour augmenting technology. (a) Does this production function exhibit constant returns to scale in K and L? Explain. (b) Express the above production function in its intensive form (i.e., output per-effective worker y as a function of capital per effective worker k). (c) Solve for the steady-state value of y as a function of saving rate s, population growth rate n, technological progress g, and capital depreciation rate 6. (d) The developed country has a savings rate of 30% and a population growth rate of 2% per year. Meanwhile, the developing country has a savings rate of 15% and population growth rate of 5% a year. Technology evolves at the rate of 8% and 2% in…
- 3.1 Robert Solow added.......................... to the conventional production function to account for technological change.The aggregate production function is y=3KL. If they are 30 units of capital and 40 units of labor, what is aggregate output? What is labor productivity? What is capital productivity?Why does an increase in the labor force cause the Market Productivity of Capital to increase?
- Suppose a country has a population of 120 people, a working-age population of 100 people, its labor force participation rate is 0.5 (50%), and the quantity of output is 60 units. Suppose that the production function of the economy is given by Y=2N, where Y represents the quantity of output and N represents the number of workers needed to produce the output. I know the answer is 0.4 but I don't understand how to get it. Thank you!If we have an aggregate production function of the form Y = AK, at what capital-labor ratio can a steady-state equilibrium be reached?The “per person” versions of production functions: Write each productionfunction given below in terms of output per person y ; Y/L and capital perperson k ; K/L. Show what these “per person” versions look like in a graphwith k on the horizontal axis and y on the vertical axis. (Assume A is somefxed positive number.)(a) Y = K 1/3L2/3 and Y = K 3/4L1/4 (on the same graph) (b) Y = K(c) Y = K + AL(d) Y = K − AL