Determine implications in long-run steady state equillibrium

Reference no: EM13222430

In Malthusian framework, the growth of population (which is assumed to be the same as labor) depends on current population and how much they consume: future population, N' = C^.5 N^.5 where N is current population and C is current consumption. Also, agricultural (wheat) production uses land and labor: output, Y = L^.5 N^.5, where L is amount of land in production.

1) Quantify the important economic variables, namely, employment,aggregate output, aggregate consumption and per capita consumption, in the long run steady state equilibrium, if L = 100. Explain, carefully, how you get your

2) If Agrasia doubles land available for wheat production, determine the implications in the long-run steady state equilibrium. Show your work

Reference no: EM13222430

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