The aggregate production function

Reference no: EM13693830

Suppose the aggregate production function in ADANAC is Yt = A K1/3 L 2/3. Assume A is constant and equal to 2.

1. What are the returns to scale in this production function?

2. Are there decreasing returns to labour and capital?

3. Write the aggregate production function in per worker terms

4. Assume that saving rate is equal to 0.32, population growth 0.03, and the depreciation rate 0.05. What is the steady state level of output per worker?

5. If the saving rate decreases to 0.20, what would happen to the steady state level of output per worker? (3 points)

Reference no: EM13693830

Questions Cloud

Two-thirds of funding for substance abuse treatment : About two-thirds of funding for substance abuse treatment comes from taxpayers. Are there external benefits of substance abuse treatment that warrant this level of public funding?

Firm purchases r in a purely competitive resource market : Assume that a firm purchases R in a purely competitive resource market; that is, the firm can purchase any amount of resource R it chooses without affecting the price of R.

Difference between economic and statistical significance : Explain the difference between economic significance and statistical significance. Why shouldn't researchers place too much focus on statistical significance? What are the steps researchers should take when discussing statistical significance?

Implementing a system of statistical process control : Sally Statistics is implementing a system of statistical process control (SPC) charts in her factory in an effort to reduce the overall cost of scrapped product. The current cost of scrap is $X per month.

The aggregate production function : Suppose the aggregate production function in ADANAC is Yt = A K1/3 L 2/3. Assume A is constant and equal to 2. What are the returns to scale in this production function?

Federal tax and expenditure programs : Federal tax and expenditure programs:

Government is lobbied to institute price controls because : Government is lobbied to institute price controls because:

Explain cause of wage differentials using migration theory : Explain the cause of wage differentials using the compensated wage theory, be brief (5 pts). Explain the cause of wage differentials using the human capital theory, be brief (10 pts). Explain the cause of wage differentials using the migration theory..

What is the breakeven point of this book : Suppose that you are a consultant to a firm that publishes books. Suppose that the firm is about to publish a book that will sell for $24 a copy. The fixed coat of publishing the book are $7200, the variable cost is $18 a copy. What is the breakeven ..

User Account

All Pages