Consider a closed economy in which the population grows at the rate of 2% per year. The per-worker production function is given as: y = 10/k, where y is output per worker and k is capital per worker. The depreciation rate of capital is 73.00% per year. Suppose that households consume 70% of income and save the remaining 30%. There is no government. (Enter all responses as integers or decimals rounded to one place as appropriate.) What is the steady-state value of capital per worker? k = What is the steady-state value of output per worker? y = What is the steady-state value of consumption per worker? c = What is the steady-state value of investment per worker? i= Suppose that the economy now wanted to increase its steady-state level of output per worker. If the economy wanted to double the level of output per worker (from 40 to 80), what is the level of capital per worker, k, needed? What fraction of income would households have to save in order to increase the level of capital per worker to achieve this increase in output? (Enter your response as a decimal rounded up to three places as appropriate).

Consider a closed economy in which the population grows at the rate of 2% per year. The per-worker production function is given as: y = 10/k, where y is output per worker and k is capital per worker. The depreciation rate of capital is 73.00% per year. Suppose that households consume 70% of income and save the remaining 30%. There is no government. (Enter all responses as integers or decimals rounded to one place as appropriate.) What is the steady-state value of capital per worker? k = What is the steady-state value of output per worker? y = What is the steady-state value of consumption per worker? c = What is the steady-state value of investment per worker? i= Suppose that the economy now wanted to increase its steady-state level of output per worker. If the economy wanted to double the level of output per worker (from 40 to 80), what is the level of capital per worker, k, needed? What fraction of income would households have to save in order to increase the level of capital per worker to achieve this increase in output? (Enter your response as a decimal rounded up to three places as appropriate).

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 2Assume production function is given by:Y= K(1/2) L(1/2)a. Write the production function in per worker terms (y=f(k))b. Assume that the per worker level of capital in the steady state is 4, the depreciation rate is 5% per year, and population growth is 5% per year. Does this economy have “too much” or “too little” capital? How do you know? [Show your work].
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In Wonderland production per worker (y) depends on capital per worker() such the y=10vk. Every year 15% of the capital stock depreciates, while workers in Wonderland save 10% of their income. Every year the population grows ratas te of 3% (c) The country of Neverland is identical to Wonderland in terms of output per worker, the savings rate, the depreciation rate and population growth. They differ in one respect: Wonderland has capital per worker of 10, whereas Neverland has capital per worker of 20. Which country experiences a higher growth rate of output per worker and how will their growth rates evolve over time?
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Explain question no7 onlys early. But correctly solve
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