Question: Consider the following variation: There is only a single difference: weve changed the exponent on At in the production of the output good so that

Consider the following variation:

There is only a single difference: we€™ve changed the exponent on At in the production of the output good so that there is now a diminishing marginal product to ideas in that sector.
(a) Provide an economic interpretation for each equation.
(b) What is the growth rate of knowledge in this economy?
(c) What is the growth rate of output per person in this economy?
(d) Solve for the level of output per person at each point in time.

1+1 at' af

Step by Step Solution

★★★★★

3.39 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Ideas run into diminishing returns you find the best ideas first then you find le... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

780-B-E-M-E (7132).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Now let the production function for output be That is, weve made the exponent on capital a parameter () rather than keeping it as a specific number. Notice that this affects the exponent on labor as...

Weve claimed that the efficient way to spread out work across firms in the same industry is to set the marginal cost of production to be the same across firms. Lets see if this works in an example....

Weve just reviewed the quantity theory, which is a theory that shows how the economy fixed itself in the long run. But as economist John Maynard Keynes famously said, In the long run we are all dead....

A variation on the Romer model: Consider the following variation: Y, = AV2Lyt, AA, = ZA,Lat, Lyt + Lat = N, La = EN. There is only a single difference: we've changed the exponent on A, in the...

need help with econ Consider the following variation: Y: = AtlLl AAHI = 5:4ch Lm+L = I; L\"; = if. There is only a. single difference: we've changed the exponent on A; in the production of the output...

3. Consider the following variation of the Romer model: K:Wa M=ma Ly, + La: = L LM = if There is only a single difference. The exponent on At, in the production of the output good, has changed. There...

Consider the following variation of Activity Selection problem: Input A set of n task ay, a.. an,each expressed as All the tasks are executed by a single CPU without a time overlap after the time...

2. (20pts) Consider the following variation of Activity Selection problem Input: A set of n task a,, a2,.... an each expressed as a,-(n, di) where is the release time, and d, the time duration....

2. (20pts) Consider the following variation of Activity Selection problem: Input: A set of n task a1, a2,.., an each expressed as ai-(ri di) where r is the release time, and di the time duration. All...

This is part one of a two-part assignment starting with an introductory look at process design and supply chains. Identify a company with which you are familiar. This could be your place of...

For answer these questions you need looking for on search for country Cyprus- City " Limassol " on this Country For me is requested to provide me the following-Historical data on Property price and...

1 1 0 The statement of cash flows summarizes the operating financing and investing activities of an entity is another name for the income statement must be prepared daily is a special section of the...

Explain how a project group could help a manager with the task of introducing important changes to the business. [6]

A company made an initial public offering (IPO) by selling new shares for new investment funding The par value of the share is $4.00 and 450,000 units of share were sold The selling price of the IPO...

A company is analyzing the makeup of its employees according to their education level and gender using the contingency table below. What is the expected value in the shaded cell? Male Female Row...

Question 5 One really important concept to understand in finance is the difference between simple and compounded interest. This simply concept has many ramifications for how we value different...