For this question use this aggregate production function as a model of output. Y=Ax/K xL The marginal product of capital can be defined as the extra output (Y) that would be produced if you increased the capital (K) by one unit. For simplicity assume A=L=1: Fill in the MPK for each level of capital in the table. K MPK 1 2 What do you notice about the MPK as K increases while L and A are held fixed? O it gets smaller and smaller O it gets larger and larger

For this question use this aggregate production function as a model of output. Y=Ax/K xL The marginal product of capital can be defined as the extra output (Y) that would be produced if you increased the capital (K) by one unit. For simplicity assume A=L=1: Fill in the MPK for each level of capital in the table. K MPK 1 2 What do you notice about the MPK as K increases while L and A are held fixed? O it gets smaller and smaller O it gets larger and larger

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 29CTQ: How is the concept of technology, as defined with the aggregate production function, different from...

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In class we argued that if people could accumulate human as well as physical capital, the production function would look like the “AK” production function. • (a) If the production function is AK and the savings rate is constant at rate “s”, and the rates of depreciation and populati on growth are δ and n respectively, what would the growth rate of the economy be? • (b) What would be the macroeconomic consequences of decreasing the savings rate in this economy? • (c) What would be the consequences of an increase in fertility in this economy? • (d) Would the consequences of decreasing fertility be UNAMBIGUOUSLY GOOD? • (e) Can human capital grow without bounds? Explain why or why not (make sure you discuss the physical nature of human capital). • (f) What is the growth rate of the economy (in the absence of technological progress) if human capital cannot grow without bounds?
Hello I need help to find the answer for my econ 101 hw for a question as follows: Assume that the production function for a country is given by ?=√K and annual investment is given by the function ?=?×? where γ=0.270, and that the yearly depreciation rate is 4.50%. Suppose that this year, the output in the country is 1, and a neighbor country's output is 50% higher. Calculate the time it would take for the country's output to catch up with its neighbor's output. Assume the neighbor country's economy is neither growing nor shrinking. I will be also attaching the original problem for your reference as I just need to find the time that it would take the country's output to catch up with its neighbor's output. Thank You and please refer to the image to further assist with the question that I want answered.
Assume that we have a Cobb-Douglas type aggregate production function in the form: Y = Ka.Lb c. Briefly explain why y'>0 or dy/dk > 0 . Is it possible that dy/dk < 0 ? Why? d. Briefly explain why y'' ≤ 0 . e. Find the elasticity of substitution between K and L. What does expansion path look like?
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Suppose that we have an economy whose production can be represented by a Cobb Douglas production function with parameter α=0.3. You may assume that there is no depreciation (i.e. δ=0). a. What fractions of income do capital and labor receive? b. For the following parts, describe what happens to output (in percent), the rental price of capital and the real wage from: i) Suppose that immigration increases the labor force by 10 percent. ii) Suppose that a gift of capital from abroad raises the capital stock by 10 percent. iii) Suppose that a technological advancement raises the value of the parameter A by 10 percent. Type out the correct answer ASAP with proper explanation
Consider an economy with the following aggregate production function: Y = 3K1/3(AL)2/3 Capital grows through investment but also decays due to wear and tear at a constant rate δ per period. Assume that A is growing at the exogenous rate g, that L is growing at the exogenous rate n, and that households save a constant proportion s of their income. (a ) Find the steady state level of the capital per effective worker (k*), output per effective worker (y*) and consumption per effective worker (c*) - in terms of the parameters of the model. (B) What is the level of k (k**) that maximizes consumption? (C) Given a depreciation rate of 7%, population growth rate of 2%, technological progress of 1% and a saving rate of 30%, calculate the steady state levels of k, y and c. (D) To move to the level of capital that maximizes consumption, how should the saving rate be changed? Explain. (E) Calculate the saving rate needed to reach the golden rule level of capital per effective worker.
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