Please, I urgently need this exercise. Area of expertise is macroeconomics: Solow growth model. Consider land as an additional productive factor and assume that theproduction function is:Y = A Xa L-a, 0< a <1where 0 < a < 1, and X is a factor composed of the factors land (D) and capital(K), such that:X = DB K1-B ,0 < B < 1Capital can be produced while the land factor cannot be increased, i.e., itremains in time. Let s,n and & be positive constants.(a) Express the production function per worker in terms of land per worker (d)and capital per worker (k).b) Write the equation for the increase in capital per worker (k).(c) Show that this model implies that the level of output per worker tends to zeroover time. Why does this result obtain?(d) Suggest some modification in the production function that maintains theproductive factor land but prevents the result in (c) from being obtained,showing that result.

Start by setting up the model. The production function is given by Y=AXαL1-α; X=DβK1-β We are told…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Derive the steady state level of capital K*, output Y* and output per capita y* in terms of model parameters (A, 3, L, d, a). Below is the solution Pls explain step by step
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