A country has two possible technologies (production functions) to choose from:
Technology A:YA=K1/3AN2/3AYA=KA1/3NA2/3
Technology B: YB=K2/3BN1/3BYB=KB2/3NB1/3
Once chosen, the country cannot switch the technology.
The country has:
population growth rate n>0n>0,
depreciation rate d>0d>0,
TFP z=1z=1,
saving rate s>0s>0.
Required
a. Show that both countries have constant returns to scale (CRS) technologies.
b. Find the non-zero steady states of the two countries.
c. Which of the two technologies would lead to a higher steady state per-capita consumption? Does your conclusion depend on how fast the population is growing?

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