On January 1, 2026 each of Boblandia's 100 workers has $1 in physical capital. Over the course of the year, its physical capital depreciates by 5%, and the number of workers increases by 5%. How much does Boblandia have to invest in 2026 to make sure that its capital to labour ratio is the same on January 1, 2027 as it was on January 1, 2026

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section18.4: The Other Factors Of Production: Land And Capital
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1 ) On January 1, 2026 each of Boblandia's 100 workers has $1 in physical capital. Over the course of the year, its physical capital depreciates by 5%, and the number of workers increases by 5%. How much does Boblandia have to invest in 2026 to make sure that its capital to labour ratio is the same on January 1, 2027 as it was on January 1, 2026

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