Determine the wage of labor, Microeconomics

Assignment Help:

Consider a hypothetical nation, Solowland, which were in the steady state. We consider a constant return to scale production function based on two production factors, labor and capital. The Solowland government recently took policy measures to support family with children. As a result, Solowland undergoes an increase in the population growth rate and it will remain high over time. Complete the table below for the effects (direction only, not size, such as "increased", "decreased", "unchanged", and "ambiguous") of higher population growth rate on

i. the wage of labor, w (hint: it is determined by marginal product of labor)

ii. the rental rate, r (hint: it is determined by marginal product of capital)

iii. capital per worker, k

iv. income per worker, y

v. consumption per worker, c

both initially (the instance of an increase in the growth rate of labor force) and in the new steady state, as compared to the previous steady state (before the increase in the population growth rate). Then, support your answer in words and/or figure. There have been and will be no changes in the savings rates, and depreciation rates. We disregard exogenous technological progress (g=0). (200 words)

 

Initially

New Steady State

i. the wage of labor, w

 

 

ii. the rental rate, r

 

 

iii. capital per worker, k

 

 

iv. income per worker, y

 

 

         v. consumption per worker, c

 

 


Related Discussions:- Determine the wage of labor

Economic models, the general characterictics of economic models,its limitat...

the general characterictics of economic models,its limitations and verification

Functions of the ifc, Functions of the IFC: The purpose of the IFC is ...

Functions of the IFC: The purpose of the IFC is to further economic development by encouraging growth of private enterprise in member-countries. The IFC, therefore:  •  inv

Central problem of economy, explain the central problem of economy with p...

explain the central problem of economy with production possibility curve?

Explain the appliance for household use be treated, In an updated GDP that ...

In an updated GDP that contains household production, how would the purchase of a car or appliance for household use be treated? A car or appliance would be treated as a househ

Measuring costs, Measuring Cost: Which Costs Matter? Accounting Cost v...

Measuring Cost: Which Costs Matter? Accounting Cost versus Economic Cost - Accounting Cost Actual expenses and adding the depreciation charges for the capital equip

Explain how keynesian economics views the role of markets, Explain how Keyn...

Explain how Keynesian economics views the role of markets and government intervention in fighting business cycles. Keynesian economics believes markets frequently fail and gov

Terms of trade, Terms of Trade: The ratio of average price of a country's e...

Terms of Trade: The ratio of average price of a country's exports, to average price of its imports, is its terms of trade. Theoretically an improvement in a country's terms of trad

Technology of production, The Technology of Production *  The Productio...

The Technology of Production *  The Production Process - Combining inputs or the factors of production to attain an output *  Categories of Inputs (or the factors of prod

Tariff, Tariff: A tariff is a tax imposed on the purchase of imports. It is...

Tariff: A tariff is a tax imposed on the purchase of imports. It is generally imposed in order to stimulate more domestic production of the product in question (rather than meeting

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd