Consider a simple variant of the Solow Growth model. The main difference from the standard model is in the aggregate production function. All other aspects are the same as in the Solow framework (and the steps in the solution of the model are the same). The aggregate production function is as follows: Y = aK, + BN where Y, stands for output, K, for the aggregate capital stock, N, for the size of the labor force (there is no unemployment), and a and 8 are two positive numbers. Notice that the aggregate production function is linear in the inputs (i.e., if you were to graph their marginal products, they would be constant and not decreasing as in the standard Solow case). The labor force grows at rate n, capital depreciates at rate d, and the households save a constant fraction s of their income. (a) Manipulate the aggregate production function to express output per worker y, as a function of the capital-labor ratio kt. (b) Write the condition for a steady-state and find the expression for the steady-state capital-labor ratio k, assuming that sa

Consider a simple variant of the Solow Growth model. The main difference from the standard model is in the aggregate production function. All other aspects are the same as in the Solow framework (and the steps in the solution of the model are the same). The aggregate production function is as follows: Y = aK, + BN where Y, stands for output, K, for the aggregate capital stock, N, for the size of the labor force (there is no unemployment), and a and 8 are two positive numbers. Notice that the aggregate production function is linear in the inputs (i.e., if you were to graph their marginal products, they would be constant and not decreasing as in the standard Solow case). The labor force grows at rate n, capital depreciates at rate d, and the households save a constant fraction s of their income. (a) Manipulate the aggregate production function to express output per worker y, as a function of the capital-labor ratio kt. (b) Write the condition for a steady-state and find the expression for the steady-state capital-labor ratio k, assuming that sa

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Something that is perceived as a luxury rather than a need is something that brings pleasure. Worldwide, the majority of people view food, shelter, and water as requirements. Undoubtedly, indoor plumbing and electricity would be included on the list by many Americans. As opposed to being a luxury, internet connection is increasingly considered as a need. But is it actually essential for surviving? What then happens to those who don't utilize or have access to the internet? Could the expansion of e-commerce be impacted by how people view Internet connection as a need or a luxury?
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