For the first several questions, you will deal with Westburg, a nation with a per-worker production function y = f(k) = 5k1/2 (5 times the square root of k). The marginal product of capital for this production function is 2.5k-1/2 (2.5 times 1 divided by the square root of k, or 5 divided by (2 times the square root of k)). The economy starts with 400 units of capital per worker (see Table One); people in the economy consume 86% of each dollar of income they earn, and machinery depreciates at a steady rate to be totally used up/worthless in 50 years. There is no technology or population growth.
Row |
k |
y |
c |
i |
δk |
Δk |
1 |
400 |
a |
b |
c |
d |
e |
2 |
f |
g |
h |
i |
j |
k |
3 |
l |
m |
n |
o |
p |
q |
1) Enter your answer for Cell a in Table One
2) Enter your answer for Cell e in Table One
3) Enter your answer for Cell f in Table One
4) Enter your answer for Cell h in Table One
5) Calculate its steady-state level of capital per worker. Round your answer to the nearest whole number.
For the first several questions, you will deal with Westburg, a nation with a per-worker production...
An economy has a per worker production function y=k^1/4, a marginal propensity to save of 24%, a population growth rate of 4%, and capital depreciates at a rate of 2% each period. what is the steady state capital/worker ratio?
1. Assume that an economy described by a Solow model has a per-worker production function given by y- k05, where y is output per worker and k is capital stock per worker (capital-labor ratio). Assume also that the depreciation rate δ is 5%. This economy has no technological progress and no population growth (n 0). Both capital and labor are paid for their marginal products and the economy has been in a steady state with capital stock per worker at...
Suppose you are a policy maker who wants to select a level of saving rate that would maximize consumption per worker. Given that output per worker is a square root of capital per worker, and 10% of capital depreciates every year. (a) Construct a table with the following saving rates: 0.3, 0.4, 0.5 and 0.6. For each saving rate, fill the table with values for capital per worker, output per worker, depreciation per worker, consumption per worker and marginal product...
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supposed the production function is given by yt=kt1/2 where y is the output per worker and k is the capital per worker. assume that the saving rate (s) is exogenous and the capital depreciates at S rate. If the sum of both is depreciation rate and the saving rate equals 1. Furthermore, assume that s=3S The steady state output a)9 b)2.25 c)3 d)0.75
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