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

Total revenue curve, draw the total revenue curve and the total cost curve ...

draw the total revenue curve and the total cost curve showing the profit maximizing level

Choosing inputs to minimize cost, Choosing Inputs  How to minimize ...

Choosing Inputs  How to minimize cost for the given level of output. We can do so by combining Isocosts with Isoquants                              Producing a

Second best theory, what is the theory of second best?prove the theorm with...

what is the theory of second best?prove the theorm with the help of diagram?

Find the highest interest rate, Find the highest interest rate: There ...

Find the highest interest rate: There are 2 entrepreneurs, Sally and Paul.  The return to their projects are given by: To finance the project, each entrepreneur needs

Linear break even analysis, what do you understand by linear break-even poi...

what do you understand by linear break-even point? in what way is it useful in managerial economics? what are the assumptions underlying the analysis?

Demand function, The Acme Bakery in the seaside resort town of Malvino sel...

The Acme Bakery in the seaside resort town of Malvino sells freshly baked bread to two categories of consumers: residents of the town and tourists. The weekly demand from touris

Shortage/surplus, Students at XSU cannot register for english classes. Is t...

Students at XSU cannot register for english classes. Is this a situation of shortage or surplus of classes? Explain. Also would you expect market forces to do to tuition?

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