For a particular economy, the following capital input K and labour input N were reported in four
Question:
The production function in this economy is
Y = K0.3N0.7
where Y is total output.
a. Find total output, the capital-labour ratio, and output per worker in each year. Compare year 1 with year 3, and year 2 with year 4. Can this production function be written in per-worker form? If so, write algebraically the per-worker form of the production function.
b. Repeat part (a) but assume now that the production function is Y = K°3N°-8.
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Related Book For
Macroeconomics
ISBN: 978-0321675606
6th Canadian Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
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