Consider the Romer model of ideas seen in lectures. Ideas are accumulated following AA = 0LA, with 0 = OL^-'A®. Assume that A = 1. In this case o an increase in the number of researchers La increases the rate at which each researcher finds a new idea an increase in the number of researchers La lowers the rate at which each researcher finds a new idea o an increase in the number of researchers La has no effect on the rate at which each researcher finds a new idea O None of the above

Consider the Romer model of ideas seen in lectures. Ideas are accumulated following AA = 0LA, with 0 = OL^-'A®. Assume that A = 1. In this case o an increase in the number of researchers La increases the rate at which each researcher finds a new idea an increase in the number of researchers La lowers the rate at which each researcher finds a new idea o an increase in the number of researchers La has no effect on the rate at which each researcher finds a new idea O None of the above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please don't copy
Answer ASAP
Identification. Answer the following questions below.
In the Spesific Factors Model, assume that in Country A, "wheat" is produced by using land and labor, "leather" is produced by using capital and labor. Labor is defined as a ................................ ( mobile/ specific/ fixed) factor.
See Figure 2.2 and examine the model. Unlike other circular flow models, this model is missing another sector/s. what is the missing sector?
In 1928, Charles Cobb and Paul Douglas published a study in which they modeled the growth of the US economy during the period 1899 to 1922. The function used to model production was of the form: (1) P(L, K) = 6LªK!-a where P is total production (monetary value of goods produced in the year); L, the amount of work (total number of person-hours worked in a year); and K, the amount of capital invested (monetary value of machinery, equipment and buildings). In these terms, the hypotheses made by Cobb and Douglas can be stated as follows: (i) If either labor or capital cancel each other out, so does production. (ii) The marginal productivity of labor is proportional to the amount of output per unit of work. (iii) The marginal productivity of capital is proportional to the amount of production per unit of сapital. 1. The output per unit of work is (a) Tick the alternative that, for some constant a, describes the hypothesis (ii) = aP·L. = a. P () aL L P = a. (b) If we keep K constant, K = K0,…
Q12
Suppose the parameters of the Romer model take the following values: A = 100 = 0.05, Z = 1/100, and I = 1,000. What is the growth rate of this country's economy? 10 percent O 40 percent O 0.02 percent O 50 percent O 0.10 percent
Consider the model of a firm that produces final goods using R&D and components as inputs, with cost dataas follows:Assembly: Total cost of production = PAQA = 400Earnings of High-Skilled Labor = WHHA = 100Earnings of Low-Skilled Labor = WLLA = 200Earnings of Capital = RKA = 100R&D: Total cost of production = PRQR = 400Earnings of High-Skilled Labor = WHHR = 175Earnings of Low-Skilled Labor = WLLR = 125Earnings of Capital = RKR = 100A) Which factor is assembly intensive? In which factor(s) is R&D intensive?B) Suppose that due to the opening of trade, the price of assembly falls by ∆PA/PA = −20%, the price of R&D remains unchanged, ∆PR/PR = 0%, and capital’s share earnings remains constant.C) What has happened to the relative wage of high-skilled/low-skilled labor? Does this match the predictions of the offshoring model?
2. Consider the Romer model: Y = ALyt AA++1 = ZA,Lat Lat + Lyt = L Lat = IL a) Assume that A, = 1, ī = 0.02, z = 0.0001, L = 10,000. Find the growth rate of knowledge in and the growth rate of output per person. the economy b) Compare two economies: one with parameter values as in a) and the other one with the same parameter values except for the initial set of knowledge A, = 5. Briefly explain what will be the differences in the growth rates of knowledge and output per worker? Show the paths for output per worker on a graph. c) The government believes that the growth rate of output per worker is low and thinks about measures that would increase it. There are two options: (i) doubling the share of workers employed in the research sector, and (ii) increasing the population size by one third. The government can choose only one option. Which option would you recommend and why? Use a graph in your answer.
Ceteris paribus, an increase in productivity would be represented by a movement from A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
Consider the model of a firm that produces final goods using R&D and components as inputs, with cost dataas follows:Assembly: Total cost of production = PAQA = 400Earnings of High-Skilled Labor = WHHA = 100Earnings of Low-Skilled Labor = WLLA = 200Earnings of Capital = RKA = 100R&D: Total cost of production = PRQR = 400Earnings of High-Skilled Labor = WHHR = 175Earnings of Low-Skilled Labor = WLLR = 125Earnings of Capital = RKR = 100A) In which factor(s) is assembly intensive? In which factor(s) is R&D intensive?B) Suppose that due to the opening of trade, the price of assembly falls by ∆PAPA= −20%, the price of R&Dremains unchanged, ∆PRPR= 0%, and capital’s share earnings remains constant.C) What has happened to the relative wage of high-skilled/low-skilled labor? Does this match the predictions of the offshoring model?