Original K = $45 billion %3D Original L 12.5 million d = 6% L growth = 2.5% K= value of kapital; L = Labor force; d = 1. What is the original K/L ratio? 45bil/12.5mil= 18:5 or 3.6 is the K/L ratio 2. After 1 year, given depreciation and the growth in the labor force, what is the new K/L ratio? 3.30 work=(45 bil–6/100×45 bil, 12.5 Million+2.5/100×12.5 million, K/L Ratio=42.3 bil/12.81 mil=3.30K/L Ratio=42.3 million12.81 million=3.30) 3. How much gross investment is necessary to bring the K/L ratio back to its original level? Investment required = $2.699 billion. a. what % of the original level of Kapital is this gross investment? Gross investment required is 6% of original Kapital. 2.699/45x100%| b. How much gross investment is necessary per unit of additional labor?

Original K = $45 billion %3D Original L 12.5 million d = 6% L growth = 2.5% K= value of kapital; L = Labor force; d = 1. What is the original K/L ratio? 45bil/12.5mil= 18:5 or 3.6 is the K/L ratio 2. After 1 year, given depreciation and the growth in the labor force, what is the new K/L ratio? 3.30 work=(45 bil–6/100×45 bil, 12.5 Million+2.5/100×12.5 million, K/L Ratio=42.3 bil/12.81 mil=3.30K/L Ratio=42.3 million12.81 million=3.30) 3. How much gross investment is necessary to bring the K/L ratio back to its original level? Investment required = $2.699 billion. a. what % of the original level of Kapital is this gross investment? Gross investment required is 6% of original Kapital. 2.699/45x100%| b. How much gross investment is necessary per unit of additional labor?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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