4. Explain the idea of the macroeconomic production function to someone whoknows no economics. The production function we have discussed relates outputper capita to technology, labor (and population growth rate), capital, and hu-man capital. We should properly think of all of these variables as endogenousvariables. Think about policies that would affect these. Articulate three policyrecommendations for each. Be careful about the distinction between labor andpopulation. Do you think policies that would maximize investment would alsomaximize welfare?5. Using the Solow model, explain the effects of the following events on steadystate income per capita level and income per capita growth rate of countryAdanus using proper terminology:(a) Aliens attack Adanus and destroy all existing factories. Thankfully, thecitizens were not affected by the attacks.(b) Adanus receives a large influx of migrants from Mersinis. Population in-creases overnight. The migrants have the same fertility rate as locals.(c) People of Adanus decided to spend less on kebap and çöp şiş due to healthreasons. As a result, saving rate in the country increases.

Since you have posted multiple independent questions, according to the guidelines, only the first…

4. Explain the idea of the macroeconomic production function to someone who knows no economics. The production function we have discussed relates output per capita to technology, labor (and population growth rate), capital, and hu- man capital. We should properly think of all of these variables as endogenous variables. Think about policies that would affect these. Articulate three policy recommendations for each. Be careful about the distinction between labor and population. Do you think policies that would maximize investment would also maximize welfare?

4. Explain the idea of the macroeconomic production function to someone who knows no economics. The production function we have discussed relates output per capita to technology, labor (and population growth rate), capital, and hu- man capital. We should properly think of all of these variables as endogenous variables. Think about policies that would affect these. Articulate three policy recommendations for each. Be careful about the distinction between labor and population. Do you think policies that would maximize investment would also maximize welfare?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4. Explain the idea of the macroeconomic production function to someone who
knows no economics. The production function we have discussed relates output
per capita to technology, labor (and population growth rate), capital, and hu-
man capital. We should properly think of all of these variables as endogenous
variables. Think about policies that would affect these. Articulate three policy
recommendations for each. Be careful about the distinction between labor and
population. Do you think policies that would maximize investment would also
maximize welfare?
5. Using the Solow model, explain the effects of the following events on steady
state income per capita level and income per capita growth rate of country
Adanus using proper terminology:
(a) Aliens attack Adanus and destroy all existing factories. Thankfully, the
citizens were not affected by the attacks.
(b) Adanus receives a large influx of migrants from Mersinis. Population in-
creases overnight. The migrants have the same fertility rate as locals.
(c) People of Adanus decided to spend less on kebap and çöp şiş due to health
reasons. As a result, saving rate in the country increases.

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4. The catch-up effect Consider the economies of Sporon and Tralfamadore, both of which produce gaggles of gop using only tools and workers. Suppose that, during the course of 50 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2018 and 2068. Sporon Physical Capital Labor Force Output Productivity Year (Tools per worker) (Workers) (Gaggles of gop) (Gaggles per worker) 2018 11 30 1,800 2068 16 30 2,160 Tralfamadore Physical Capital Labor Force Output Productivity Year (Tools per worker) (Workers) (Gaggles of gop) (Gaggles per worker) 2018 8 30 900 2068 13 30 1,620 Initially, the number of tools per worker was higher in Sporon than in Tralfamadore. From 2018 to 2068, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Sporon…