Consider now the two-period model in general equilibrium, so that prices, investment and labour supply are endogenous, i.e. the production economy. Analyse and carefully explain graphically and in words the general equilibrium effects of a decrease in TFP(total factor production) for a benchmark economy with no frictions.

The concept of diminishing returns to a factor of production applies not only to capital but to labor as well. Prior to the Industrial Revolution, there was no sustained growth in living standards. Draw a graph to illustrate the relationship between population and output produced, where population is measured on the horizontal axis, both pre- and post-Industrial Revolution. 1.) Using the 3-point curve drawing tool, draw the production curve showing diminishing returns to labor. Label your curve 'Pre.' 2.) Using the 3-point curve drawing tool, draw the production curve after the Industrial Revolution. Label your curve 'Post. Carefully follow the instructions above and only draw the required objects. a

The production function used by the Australian Bureau of Statistics is written Y = AK L rY where Y is aggregate output, A is total-factor productivity, K is aggregate capital, L is the size of the labor force, I is aggregate intermediate input (e.g., energy, material), and the exponents are constants. Given this production function, which of the following expressions correctly represents the growth rate of per-capita income, 9Y? = gA + agK + BgL + Y9I = gA + agk + (1 – B) gL +ygı = 9A + agk + (B– 1) gL +Yg1 O None of the choices given is correct.

help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working

Assume the production function takes the general form: Y=Z*F (K,L,A)where all marginal products are positive.Which 3 of the following statements are correct?a. If A is fixed, then population growth acts as a drag on growth of output per person.b. If A is fixed, then population growth acts as a drag on growth, and so Malthus was correct that populationgrowth will always reverse the impact of technological improvements.c. Both rises in z and rises in K/L (capital intensity) will boost output per worker.d. Growth in output per worker can occur due to rises in z (technology) or rises in K/L (capital intensity), orboth.

Problem 4 Consider the following production function: Y, = AKÇH!-"L where Kr is capital, H;is human capital, Leis the amount of workers and A is the (constant) level of technology. • (1) Does this production function satisfy all the neoclassical properties. Discuss the meaning of each property INTUITIVELY. Imagine that parents invest in the human capital of their children up to the point where the MARGINAL PRODUCT OF PHYSICAL CAPITAL, K, is equal to the MARGINAL PRODUCT OF HUMAN CAPITAL, H:. 2 • (ii) What is the relation between K:and H:? Use this relation to write down total output as a function of Kronly. Imagine that the number of people in this economy, Nr, is different from the number of workers because some people do not work. Let l =4 be the number of workers per capita (the fraction of the population that works). Let y; ミ be output per capita and be capital per capita. Finally, let n be the rate of population growth and y, be the growth rate of labor. (ii) Using the "effective…

Confirm that the Cobb-Douglas production function satisfies all the three properties: more is better, concavity, and CRS.

Consider the Specific Factors model with two countries, Home and Foreign, with two goods, cars (c) and pharmaceutical drugs (d), and three factors, capital K, skilled labour S, and unskilled labour L. The production functions are given by 1 1 F.(Ke, Le) = K. Lễ and Fa(Ka, Sa) = K}S}. That is, skilled labour is specific to pharmaceutical drugs, and unskilled labour to cars. Suppose that the countries' factor endowments are KH = 2 = KF, 1 and SF LH and LF 3/2, and SH 1/2, so that the total labour force is 2 in %3D both countries. The price of capital is denoted by r, the price of skilled and unskilled labour by ws and Wi. Denote the goods' prices by pc and pa, and normalise pd = 1 for simplicity. The demand for cars and drugs in country j = H, F is given by x and r: 2Yi and x 3 på 3 p where Yi denotes aggregate income in country j. (f) Suppose that now that Foreign has a production technology FF (Ke, S.) = 2K Lề and Ff(La, Sa) = 2K S. %3| Describe the effect of free trade in goods but…

Labour-saving technical progress meansa) that marginal productivity of capital increases.b) that marginal productivity of labour increases.c) that marginal productivity of both inputs increases.d) None of the above is correct.

In class we argued that if people could accumulate human as well as physical capital, the production function would look like the “AK” production function. • (a) If the production function is AK and the savings rate is constant at rate “s”, and the rates of depreciation and populati on growth are δ and n respectively, what would the growth rate of the economy be? • (b) What would be the macroeconomic consequences of decreasing the savings rate in this economy? • (c) What would be the consequences of an increase in fertility in this economy? • (d) Would the consequences of decreasing fertility be UNAMBIGUOUSLY GOOD? • (e) Can human capital grow without bounds? Explain why or why not (make sure you discuss the physical nature of human capital). • (f) What is the growth rate of the economy (in the absence of technological progress) if human capital cannot grow without bounds?