When capital increases by AK units, output increases by _. Choose the correct one. ΔΝ units ΜΕΝ Χ ΔΝ units ΜΡκ Χ ΔΚ units ΔΚ units

At some point, if all factors of production are being used, it becomes impossible to generate additional output, so the AS curve becomes (two words, 1 mark). 18

Why do we assume that changes to Total Factor Production are persistent? i know that its important and that it affects the outcome. is it because persistent means the changes are not temporary in the market and therefore doesnt try to readjust over time but rather it has long term affects.

Suppose the production function in an economy is Y = K0.SL05, where K is the amount of capital and L is the amount of labor. The economy begins with 25 units of capital and 25 units of labor. Round answers to two places after the decimal when necessary. a. How much output does the economy produce? units of output

asap Suppose the economy's production function is Y = AKO.3NO.7. If K=2000, N = 100, and A = 1, then Y=246. If K and N both rise by 20%, and A is unchanged, by how much does Y increase?

An economist fits the following production function to data from Australia and New Zealand, Y = AK" L1-« She estimate that for Australia, a = = 0.7. She estimates that for New Zealand, a = = 0.2 Based on this information, which of the following statements is most likely to be correct. There is not enough information to comment on the relative capital intensities Production wilI be relatively more capital intensive in New Zealand than in Australia Production will be relatively more capital intensive in Australia than in New Zealand Production will be equally as capital intensive in each country since they both experience constant returns to scale

Depreciation, investment, and output per worker juts Depreciation, ök Ass Output, (k) Investment, (k) Capital per worker (K) The aggregate production function of capital states that output is determined by:

(ii) What is the relation between Kt and Ht? Use this relation to write down total output as a function of Ktonly. Imagine that the number of people in this economy, Nt, is different from the number of workers because some people do not work. Lt Let lt - be the number of workers per capita (the fraction of the population that works). Let y Nt Yt be output per capita and Nt Kt kt be capital per capita. Finally, let n be the rate of population growth and y, be the growth rate of labor. Nt (iii) Using the "effective production function" you derived in (b), write down output per capita, yt, as a function of capital per capita, kt, labor per capita, lt, the level of population Nt, and the level of technology, A. Following Solow and Swan, assume there is no government and no net exports, that the depreciation rate of capital is the constant 8 > 0 and the savings rate is constant 0 < s < 1. (iv) DERIVE the fundamental equation of Solow-Swan. How does the growth rate of capital depend on…

worn out in the production process. ment Now IzMe: Section 2.7 uge your comprehension of this section. To begin, please click the wnward arrow located at the top right of this box. Assignment Score: 0.00% Submit Assignment for Grading Save ns tu2et10h_Ch02_Sec07.02m « Question 2 of 3 » Check My Work Three different economies have made choices about the production of capital goods. Which of the following is most likely to produce the greatest growth in the production possibilities curve (PPC)? O a. Less production of capital goods than what is needed to replace worn-out capital. Ob. Capital goods produced at the exact rate needed to replace worn-out capital. c. More production of consumption goods that replace worn-out capital. O d. Greater production of capital goods than what is needed to replace worn-out capital. MacBook Air DD F6 EZ F8 F9 F10 F11 F12 & * 6 7 8 { P + 000

The following data give real GDP, Y, capital, K, and labor, N, for the U.S. economy in various years. Units and sources are the same as in Table 3.1. Assume that the production function is Y-AK0.3N0.7 Year 1970 1980 1990 K 5600 8055 10,946 2000 13,131 14,711 137 2010 15,599 17,682 139 ● Y 4951 6759 9365 L 79 99 119 (a) Calculate total factor productivity (A). By what percentage did U.S. TFP grow: between 1970 and 1980? between 1980 and 1990? between 1990 and 2000? between 2000 and 2010? (b) Plot the short-run production function while keeping capital fixed at the 1970 level. (c) What happened to the marginal product of labor between 1970 and 2010? HINT: Calculate the marginal product numerically as the extra output gained by adding 1 million workers in each of the two years. (The data for employment, N, are measured in millions of workers, so an increase of 1 million workers is an increase of 1.0.)