(4) The per-worker production function for a given nation can be written as y = 140k, where k=K/L (capital K divided by

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4 The Per Worker Production Function For A Given Nation Can Be Written As Y 140k Where K K L Capital K Divided By 1 (31.82 KiB) Viewed 50 times

(4) The per-worker production function for a given nation can be written as y = 140k, where k=K/L (capital K divided by labor L, or the amount of capital per worker) and y = output per worker. The amount of labor, L. is constant at 2000. But depending on different government programs and investment spending levels, the amount of K (capital - in other words, machinery used in production) might change. There is a 50% chance that there will be 28,000 units of capital; a 10% chance that there will be 45,000 units of capital; a 25% chance that there will be 36,000 units of capital; otherwise, there will be 40,000 units of capital. These are the only four possible values. a) Calculate the expected number of units of capital per worker k. b) Calculate the expected output per worker y.