6. Consider a hypothetical economy that has the production function Y = F(K, LE) = K¹/3 (LE) 2/3, where Y is output, K is capital, and LE is the number of effective workers. Suppose the saving rate is 20%, the capital depreciates by 3%, the population grows at the rate of 1%, and the rate of labor-augmenting technological change is 1%. a. Solve for the per-effective-worker production function.
6. Consider a hypothetical economy that has the production function Y = F(K, LE) = K¹/3 (LE) 2/3, where Y is output, K is capital, and LE is the number of effective workers. Suppose the saving rate is 20%, the capital depreciates by 3%, the population grows at the rate of 1%, and the rate of labor-augmenting technological change is 1%. a. Solve for the per-effective-worker production function.
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.2P
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![6.
Consider a hypothetical economy that has the production function Y = = F (K, LE) =
K¹/3 (LE) 2/3, where Y is output, K is capital, and LE is the number of effective workers.
Suppose the saving rate is 20%, the capital depreciates by 3%, the population grows at
the rate of 1%, and the rate of labor-augmenting technological change is 1%.
a. Solve for the per-effective-worker production function.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3b86c937-5166-4755-9109-14026c666123%2Fbe556690-8129-4291-92be-9be4a85523e0%2Fh2f34lp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:6.
Consider a hypothetical economy that has the production function Y = = F (K, LE) =
K¹/3 (LE) 2/3, where Y is output, K is capital, and LE is the number of effective workers.
Suppose the saving rate is 20%, the capital depreciates by 3%, the population grows at
the rate of 1%, and the rate of labor-augmenting technological change is 1%.
a. Solve for the per-effective-worker production function.
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