Suppose that the net investment flow is described by the equation I(t) = 3t/2 and that %3D the initial capital stock, at time t = 0, is K(0). What is the time path of capital K?
Suppose that the net investment flow is described by the equation I(t) = 3t/2 and that %3D the initial capital stock, at time t = 0, is K(0). What is the time path of capital K?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 12P
Related questions
Question
![Suppose that the net investment flow is described by the equation I(t) = 3t/2 and that
the initial capital stock, at time t= 0, is K(0). What is the time path of capital K?
If net investment is a constant flow at I(t) = 1000 (Ghana Cedis per year), what will be
the total net investment (capital formation) during a year, from t= 0 to t= 1?
If I(t) = 3t/2 (thousands of Ghana Cedis per year) – a nonconstant flow – what will be
the capital formation during the time interval [1, 4], that is, during the second, third, and
fourth years?
i) Show that the Cobb-Douglas production
Q=AK*L-a
where Q is total output, Kis capital stock, Lis labour stock and A and a are positive
stants, exhibit constant returns to scale.
ii) What returns to scale does Q=5K025 L06 exhibit?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fed940f82-f1d0-4bc4-810b-9e281f2faa8c%2Fa224c4ae-2545-4a4c-abcd-b987a70de170%2Fz38ev6d_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that the net investment flow is described by the equation I(t) = 3t/2 and that
the initial capital stock, at time t= 0, is K(0). What is the time path of capital K?
If net investment is a constant flow at I(t) = 1000 (Ghana Cedis per year), what will be
the total net investment (capital formation) during a year, from t= 0 to t= 1?
If I(t) = 3t/2 (thousands of Ghana Cedis per year) – a nonconstant flow – what will be
the capital formation during the time interval [1, 4], that is, during the second, third, and
fourth years?
i) Show that the Cobb-Douglas production
Q=AK*L-a
where Q is total output, Kis capital stock, Lis labour stock and A and a are positive
stants, exhibit constant returns to scale.
ii) What returns to scale does Q=5K025 L06 exhibit?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
