Find an expression for the output per worker

Reference no: EM131209250

In the Solow growth model, assume that the aggregate production function is Y = zF(K;L), where Y is total output, z is total productivity, K is the total capital input, and L is the total labor input. Suppose that the Cobb-Douglas form for the production function F(K;L) = K aL^1-α, where 0

a. Find an expression for the output per worker as a function of the capital-labor ratio.

b. Suppose that the marginal product of capital increases for each level of capital, given the labor input level. What is the effect of this capital productivity increase on the aggregate production function? Show graphically the impact of this productivity increase on the steady-state capital-labor ratio and output per worker. Explain briefly.

Reference no: EM131209250

Questions Cloud

How does your selected company compare to the industry : What do the findings tell you about the financial health of the company? How does your selected company compare to the industry? Calculate each ratio using the information from the balance sheet and income statement.

Discuss the possible implications of making participation : Discuss the possible implications of making participation in social security voluntary. You can also use arguments of adverse selection and moral hazard covered in chapter 9

Define commercial paper and repurchase agreements : Define commercial paper, negotiable certificates of deposit, repurchase agreements, bankers' acceptances, federal funds, and Eurodollars.

Business making wine coolers : You are graduating in June and would like to start your own business making wine coolers. You collect the following information on the initial costs:

Find an expression for the output per worker : Find an expression for the output per worker as a function of the capital-labor ratio.

What are the advantages of owning preferred stock : Define and contrast stocks and bonds. - What are the advantages of owning preferred stock?- What are the advantages of owning common stock?

Cantankerous and very stubborn : Your superior is a cantankerous and very stubborn man who believes that the simplest approaches are the best. Your firm has just bought a van, with a five-year lifetime, for $10000.

Identify connections and relationship of principles included : Analyze the codes of conduct of at least 3 major public U.S. companies. Include citations for each of these companies' codes of conduct. Identify connections and relationships of the principles included.

Explain the possible reasons of this evolution : Show that in the competitive equilibrium, α is the fraction of national income that goes to the remuneration of capital and 1 - α is the fraction that goes to the remuneration of labor.

User Account

All Pages