# Question: Consider the Solow growth model and the following production fun

Consider the Solow growth model and the following production function: Y= K^0.3(AL)^0.7

A) If A= 2, L= 20,000 and K=400 what is Output?

B) Suppose the Labor force grows by 5% so that it is now 21,000. By how much does output increase?

C) Starting again with the conditions in part a, what is capital increases by 5%so that it is now 420. By how much does output increase?

A) If A= 2, L= 20,000 and K=400 what is Output?

B) Suppose the Labor force grows by 5% so that it is now 21,000. By how much does output increase?

C) Starting again with the conditions in part a, what is capital increases by 5%so that it is now 420. By how much does output increase?

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