If national production is given by a Cobb-Douglas production function with constant returns to scale, real...
If national production is given by a Cobb-Douglas production function with constant returns to scale, real GDP is growing at 4%, the capital to labor ratio is constant, and the labor force is growing at 1.5%, what is the growth rate of the Solow residual? Assume α = 0.3.
a) 1.5%
b) 2.5%
c) 5.5%
d) 7.0%
e) None of the above
Please provide the solving process for this problem.
Homework Answers
Add Answer to:
If national production is given by a Cobb-Douglas production
function with constant returns to scale, real...
Assume a Cobb-Douglas production function of the form: 10L023 K043 What type of returns to scale...
Assume a Cobb-Douglas production function of the form: 10L023 K043 What type of returns to scale does this production function exhibit? In this instance, r This production function exhibits returns to scale equal(Enter a numearic response using a real number rounded to two decimal places) a numenic O A. increasing returns to scale. O B. constant returns to scale. ⓔ C. initially decreasing but then constant returns to scale O D. decreasing retums to scale O E. iniially constant but...
2. Consider a Solow growth model with Cobb-Douglas production function Y Ko (AN)-a with constant savings...
2. Consider a Solow growth model with Cobb-Douglas production function Y Ko (AN)-a with constant savings rate s, depreciation rate d and no growth in productivity or labor (gA = gN = 0) (a) Suppose A = 1, a = 1/3, s = 0.2 and 5 = 0.1 (annual). Calculate the steady state capital per worker and steady state output per worker (b) Suppose that the real wage w and real return to capital r are equal to the marginal...
According to the neoclassical theory of distribution, in an economy described by a Cobb Douglas production...
According to the neoclassical theory of distribution, in an economy described by a Cobb Douglas production function, workers should experience high rates of real wage growth when a. marginal labor productivity is growing rapidly b. the capital stock is growing slowly c. the labor force is growing rapidly. d. labor productivity is growing slowly
Show that the Cobb-Douglas production function has constant returns to scale.
Show that the Cobb-Douglas production function has constant returns to scale. [Hint: start by writing out \(F(z K, z L)=A(z K)^{\alpha}(z L)^{1-\alpha}\) and use your algebra to see where you can get from here. You will need to use the following rules: \((z K)^{\alpha}=z^{\alpha} K^{\alpha}\), and \(\left.z^{\alpha} z^{(1-\alpha)}=z^{(\alpha+1-\alpha)}=z\right]\).
Consider the Cobb-Douglas production function
Please help with part c. Thank you!Returns to scale Consider the Cobb-Douglas production function, Yt = KẠN L-a=b. This production function includes three inputs: capital (Kt), labor (Nt), and land (Lt). a) Under what conditions does the function exhibit decreasing returns to scale in Kt, Nt and Lt individually? b) Show that the function exhibits constant returns to scale in Kt, Nt and Ljointly. c) Define (lowercase) yt = *, ku = and lt = . Express Yt as a...
Returns to scale. A production function has constant returns to scale with
Returns to scale. A production function has constant returns to scale with respect to inputs with inputs K and L if for any z > 0: F(z · K, z ·L) = zF(K, L), For example, for a production function with constant returns to scale, doubling the amount of each input (i.e., setting z = 2) will lead to a doubling of the output from the production function. A production function has increasing returns to scale if for any z >1: F(z ·...
6. What is the relationship between the Cobb-Douglas production function and returns to scale? (The following...
6. What is the relationship between the Cobb-Douglas production function and returns to scale? (The following questions may require using an advanced textbook, such as Varian’s “Microeconomic Analysis”)
1) Imagine a Solow Growth Model with a standard Cobb-Douglas production function and the following parameters:...
1) Imagine a Solow Growth Model with a standard Cobb-Douglas production function and the following parameters: α = 0.33; d = 0.05; A = 1; s = 0.5; n = 0.25 a) Calculate the rate of capital accumulation (law of motion) b) Calculate the steady state level of capital? c) Calculate the steady state level of real output/income? d) Calculate the steady state level of investment? e) Calculate the steady state level of consumption? f) What effect does a higher...
Question-3 (Marginal Products and Returns to Scale) (30 points) Suppose the production function is Cobb-Douglas and...
Question-3 (Marginal Products and Returns to Scale) (30 points)
Suppose the production function is Cobb-Douglas and f(x1; x2) =
x1^1/2 x2^3/2
1. Write an expression for the marginal product of x1.
2. Does marginal product of x1 increase for small increases in
x1, holding x2 fixed? Explain
3. Does an increase in the amount of x2 lead to decrease in the
marginal product of x1? Explain
4. What is the technical rate of substitution between x2 and
x1?
5. What...
Consider the following Cobb-Douglas production function for a firm that uses labor hours (L), capital (K),...
Consider the following Cobb-Douglas production function for a firm that uses labor hours (L), capital (K), and energy (E) as inputs: Q = (0.0012L^0.45)(K^0.3)(E^0.2) Determine the labor, capital and energy production elasticities. Suppose that worker hours are increased by 2 percent holding other inputs constant. What would be the resulting percentage change in output? Suppose that capital is decreased by 3 percent holding other inputs constant. What would be the resulting percentage change in output? What type of returns to scale appears...
Assume a Cobb-Douglas production function of the form: 10L023 K043 What type of returns to scale does this production function exhibit? In this instance, r This production function exhibits returns to scale equal(Enter a numearic response using a real number rounded to two decimal places) a numenic O A. increasing returns to scale. O B. constant returns to scale. ⓔ C. initially decreasing but then constant returns to scale O D. decreasing retums to scale O E. iniially constant but...
2. Consider a Solow growth model with Cobb-Douglas production function Y Ko (AN)-a with constant savings rate s, depreciation rate d and no growth in productivity or labor (gA = gN = 0) (a) Suppose A = 1, a = 1/3, s = 0.2 and 5 = 0.1 (annual). Calculate the steady state capital per worker and steady state output per worker (b) Suppose that the real wage w and real return to capital r are equal to the marginal...
Please help with part c. Thank you!Returns to scale Consider the Cobb-Douglas production function, Yt = KẠN L-a=b. This production function includes three inputs: capital (Kt), labor (Nt), and land (Lt). a) Under what conditions does the function exhibit decreasing returns to scale in Kt, Nt and Lt individually? b) Show that the function exhibits constant returns to scale in Kt, Nt and Ljointly. c) Define (lowercase) yt = *, ku = and lt = . Express Yt as a...
Question-3 (Marginal Products and Returns to Scale) (30 points)
Suppose the production function is Cobb-Douglas and f(x1; x2) =
x1^1/2 x2^3/2
1. Write an expression for the marginal product of x1.
2. Does marginal product of x1 increase for small increases in
x1, holding x2 fixed? Explain
3. Does an increase in the amount of x2 lead to decrease in the
marginal product of x1? Explain
4. What is the technical rate of substitution between x2 and
x1?
5. What...
Most questions answered within 3 hours.
-
Suppose X is a random variable whose density is f(x) = cx(1 - x)
for 0...
asked 16 seconds ago -
Below is an ANOVA
summary table. Based on these data, would you follow this ANOVA up...
asked 1 minute ago -
A golf ball rolls off a horizontal cliff with an initial speed
of 11.7 m/s. The...
asked 5 minutes ago -
1. An experiment was run where varying amounts of HClO and KClO
solutions were mixed and...
asked 16 minutes ago -
This is symbolized by a circle over a single line in an entity
relationship diagram. It...
asked 19 minutes ago -
National well-being can be measured using the Per-capita GDP
(per-capita) and the Human Development Index (HDI)....
asked 20 minutes ago -
A failure of an engine control unit causes it to fail an average
of 0.1 times...
asked 33 minutes ago -
A siren on an emergency car moving with velocity 90 km/hour
produces the sound with frequency...
asked 34 minutes ago -
Consider the schema below that models a bank’s branches,
customers and their accounts and loans. Provide...
asked 41 minutes ago -
What kinds of policies should be considered when individuals
decisions may likely impact public expense? For...
asked 49 minutes ago -
The financial statements of Apple Inc. show the following
numbers for fiscal year 2017 ($000,000):
Revenue...
asked 55 minutes ago -
Suppose that you are given the following results. Find the
correlation coefficient of the data.
sx...
asked 1 hour ago