Explain in detail... Suppose the countries of Singapore and Laos have the same production function:Y = √KLThe level of capital (K) and labor (L) for both countries is given in the Table below:Capital (K)CountrySingaporeLaos10025Labor (L)25100Output (Y)SingaporeThey will both grow at the same rate.LaosCapital perworker (K/L)Output perworker (Y/L)Given the information in the above table, which country would you expect to grow faster as a result of an equal increase in savings in bothcountries?

According to the basic growth model the rate of growth for poor countries will be higher compared to…

Suppose the countries of Singapore and Laos have the same production fu Y = √KL The level of capital (K) and labor (L) for both countries is given in the Table below: Capital (K) Output (Y) Country Singapore Laos 100 25 Labor (L) 25 100 Capital per worker (K/L) Singapore They will both grow at the same rate. Output per worker (Y/L) Given the information in the above table, which country would you expect to grow faster as a result of an equal increase in savings in both countries?

Suppose the countries of Singapore and Laos have the same production fu Y = √KL The level of capital (K) and labor (L) for both countries is given in the Table below: Capital (K) Output (Y) Country Singapore Laos 100 25 Labor (L) 25 100 Capital per worker (K/L) Singapore They will both grow at the same rate. Output per worker (Y/L) Given the information in the above table, which country would you expect to grow faster as a result of an equal increase in savings in both countries?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

See similar textbooks

Similar questions

USE R LANGUAGE TO SOLVE THE equation The output of a production process, Q is given by the function2K^(-3)L^(5/2)/2K log4 6L^2where K and L denote capital and Inbour. Calculate the output when the capital and labour are 10 and 20 units, respectively.
Show that, when using a traditional economic production function,doubling our population can double our output if capital stocks alsodouble. Use the production function: Q = AK L , where A representstechnology in an economy, K capital, and L labor. Double K and L andshow that Q also doubles, assuming α=β=1/2. Now show that, when we incorporate natural capital into thediscussion, doubling the population does not increase output in thesame way (since natural capital cannot also grow). Use theproduction function: Q = AK L N , where N is natural capital. DoubleK and L and show that Q less than doubles, assuming α=β=γ=1/3.
1. Country A and B both have the production functionY = F (K, L) = K ½L ½or Y = K0.5 L0.5 a) What is the per-worker production function, y= f (k)? Please make sure to write specificfunctional form of the per-worker production function. b) Assume that neither country experiences population growth nor technological progressand that 4 percent of capital depreciates each year. Assume further that country A saves 24percent of output each year and country B saves 16 percent of output each year. Using youranswer from part a) and the steady-state condition, find the steady-state level of capital perworker for each country. Then find the steady-state levels of income per worker for eachcountry and steady-state level of consumption per worker for each country.
PPF – what does this abbreviation stand for and what does this mean and describe it briefly?Also describe each component of the given production function P(L,K) = BLa Kb
Consider the following production diagram: 12 10 A Capital 6 2 0 0 1 Labor 4 For each of the five labeled points (A, B, C, D, and E), determine whether the correct levels of labor and capital are being used. If the correct level is not being used, explain why, and what change should be made. Hint: Start by identifying the optimal point. Being able to compare to the optimal point will assist you in determining the changes that need to be made.
Economics, physical capital represents the uildings or machines used by a business to produce product. The marginal product of physical capital presents the rate of change of output product with spect to physical capital (informally, if you increase e size of your factory a little, how much more Foduct can you create?). articular model tells us that the output product Y is given, a function of capital K, by Y = AKªL'-a ere A is a constant, L is units of labor (assumed to be stant), and a is a constant between 0 and 1. Determine marginal product of physical capital predicted by this del. ned with CamScanner
Assume that Economyland’s production function is Y = F (K, L) = K 0.5 L 0.5Where Y is output level, K is the amount of capital input, and L is the amount of laborinput. a) What is the per-worker production function, y= f (k) for Economyland? b) Assume that 10 percent of capital depreciates each year and savings rate is 20 percent,find the steady-state level of capital per worker for Economyland. Then find the steady-state levelof income per worker and steady-state level of consumption per worker. c) Is it possible to save too much? Why?
e here to search ? 2 2 3 S 1. Consider the following production function: Y=F(K, L) = A(2K + 3L) Does this production function exhibit constant returns to scale? 2. Suppose the table represents the production function of both Mexico and Spain. Use the following information to answer the next question. K = Capital (trillions) Y = Output (trillions) Country L = Population (millions) Mexico 3 Spain E D 105 3. Calculate per capita income for both countries. 4 45 2. Calculate total factor productivity for both countries using Equation 3. Equation 3: Y = F(KL) = AK0.3 L0.7 R 4. Explain the difference in per capita income. % 0.18 0.74 5 6 hip & T Y 1 G H a 00 1.0 W 1.7 39 Focus
1. O LounchPad • Country A and country B both have the production function Y = F(K, L) = K/³L²/3. a. Does this production function have constant returns to scale? Explain. b. What is the per-worker production function, y = f(k)? c. Assume that neither country experiences population growth or technological progress and that 20 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 30 percent of output each year. Using your answer from part (b) and the steady-state condition that investment equals depreciation, find the steady-state level of capital per work- er for each country. Then find the steady-state levels of income per worker and consumption per worker. d. Suppose that both countries start off with a capital stock per worker of 1. What are the levels of income per worker and consumption per worker?
Suppose that a country has a produ ction function, where Lis labour, K is capital and A is total factor produ ctivity, as follows: Y = F(K, L) = A.K0.25L0.75 a) Write the produ ction function in "intensive form" (output per worker as a fun ction of capital per worker). b) Suppose, initially,that A = 4 andits growth rate is zero. The country has a population growth of 1% per year (0.01) and a depreciation rate of 10% (0.10). If the county saves 30% of nation al in come, find the steady state levels of capital per worker, as well as con sumption andincome per worker.
33 77 Units of Units of Technolog Capital Labour 16 6. 11 11 16 D 8 24 Use the following table to answer question 36: A firm can use three different production technologies, with capital and labor requirements at each level of output as follows: Suppose the firm is operating in a high-wage country, where capital cost is $50 per unit per day and labor cost is $10 per worker per day, which technology is cheapest? O Technology A O Technology B Technology C O Technology D
Suppose the per-worker production function is: y = A(1-ga) Where ga is the fraction of all workers that produce technologies. Further, suppose the growth of technology is given by the following equation growth of A = (ga/m)(L) Suppose L = 1 and m = 7, and that initially ga = 0.7. If g, fell to 0.8 the level of output per worker would: Impossible to say fall stay the same O rise