6. Answer the following questions: (a) An economy’s production function is defined as 𝒀 = 𝑨𝑲
Posted: Thu May 19, 2022 7:31 am
6. Answer the following questions:
(a) An economy’s production function is defined as 𝒀 = 𝑨𝑲𝜶𝑳𝟏−𝜶 .
Find an equation
that shows the contribution of 𝑨, 𝑲, and 𝑳 to economic growth
(𝚫𝐘𝒀). (5 marks)
(b) Find output per labour in terms of capital per labour if 𝑨 =
𝟏 and capital’s share of
output 𝜶 = 𝟎. 𝟐𝟓. (5
marks)
(c) Find the steady-state capital per labour, output per labour
and consumption per
labour for part (b) if the saving rate is 20%
and depreciation rate is 10%. (5
marks)
(d) What is the steady-state consumption per labour? (5
marks)
6. Answer the following questions: (a) An economy's production function is defined as Y = AK“L1-a. Find an equation that shows the contribution of A,K, and L to economic growth (5 marks) (b) Find output per labour in terms of capital per labour if A = 1 and capital's share of output a = 0.25. (5 marks) (c) Find the steady-state capital per labour, output per labour and consumption per labour for part (b) if the saving rate is 20% and depreciation rate is 10%. (5 marks) (d) What is the steady-state consumption per labour? (5 marks)
(a) An economy’s production function is defined as 𝒀 = 𝑨𝑲𝜶𝑳𝟏−𝜶 .
Find an equation
that shows the contribution of 𝑨, 𝑲, and 𝑳 to economic growth
(𝚫𝐘𝒀). (5 marks)
(b) Find output per labour in terms of capital per labour if 𝑨 =
𝟏 and capital’s share of
output 𝜶 = 𝟎. 𝟐𝟓. (5
marks)
(c) Find the steady-state capital per labour, output per labour
and consumption per
labour for part (b) if the saving rate is 20%
and depreciation rate is 10%. (5
marks)
(d) What is the steady-state consumption per labour? (5
marks)
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