answer questions a and b please 3. Work It Out • Consider an economy described by the production functionY = F(K, L) = K0.4 L0.6a. What is the per-worker production function?b. Assuming no population growth or technological progress, find thesteady-state capital stock per worker, output per worker, andconsumption per worker as a function of the saving and depreciationrates.c. Assume that the depreciation rate is 15 percent per year. Make a tableshowing steady-state capital per worker, output per worker, andconsumption per worker for saving rates of 0 percent, 10 percent, 20percent, 30 percent, and so on. (You might find it easiest to use aspreadsheet.) What saving rate maximizes output per worker? Whatsaving rate maximizes consumption per worker?d. Use information from Chapter 3 to find the marginal product of capital.Add to your table from part (c) the marginal product of capital net ofdepreciation for each of the saving rates. What does your table showabout the relationship between the net marginal product of capital andsteady-state consumption?

The production function is a mathematical expression that describes the relationship between the…

3. Work It Out. Consider an economy described by the production function Y = F(K, L) = K0.4 0.6 a. What is the per-worker production function? b. Assuming no population growth or technological progress, find the steady-state capital stock per worker, output per worker, and consumption per worker as a function of the saving and depreciation rates.

3. Work It Out. Consider an economy described by the production function Y = F(K, L) = K0.4 0.6 a. What is the per-worker production function? b. Assuming no population growth or technological progress, find the steady-state capital stock per worker, output per worker, and consumption per worker as a function of the saving and depreciation rates.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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