Question: If the per-worker production function is given by y = k2, the saving rate (s) is 0.2, and the depreciation rate is 0.1, then

If the per-worker production function is given by y = k2, the

If the per-worker production function is given by y = k2, the saving rate (s) is 0.2, and the depreciation rate is 0.1, then the steady-state ratio of capital to labor is: A) 9. B) 4. C) 1. D) 2.

Step by Step Solution

★★★★★

3.47 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

y k2 where y output to labor ... 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

Students Have Also Explored These Related Economics Questions!

Bobek Inc. has recently reported steadily increasing income. The company reported income of $20,000 in 2011, $25,000 in 2012, and $30,000 in 2013. A number of market analysts have recommended that...

As part of your answer to problem 2, you computed the price of the bond [column (4)]. This is the same as the PV of cash flows in column (4). a. Recompute the price of a bond based on a 11 percent...

Consider two individuals, a rich individual and a poor individual) and two types of goods: public goods and private goods. a) Explain the effects of proportional taxation assuming that the income...

Suppose yt=5kt 0.5 (the per worker production function), d=0.1,n n=0.05, and the aggregate savings function is given by St=0.3Ytn (note that the savings rate is 0.3). n a. Solve for the steady state...

Download the data in the le titled \"AssigmnentlP'NTDataSet.xlsx". Consider the Solow model with both population growth and technological progress. In this assignment you will use the data set from...

Two countries, Richland and Poorland, are described by the Solow growth model. They have the same CobbDouglas production function, F(K, aL) = A KaL1a, but with different quantities of capital and...

Refer to Problem 1 for data and assume now that the saving rate increases to 50%. Calculate the new steady-state values of the capitallabor ratio and output. Explain your answer graphically. Data...

Use the following table to find the steady-state values of the capital-labor ratio and output per worker (i.e., complete the table) if the per worker production function is yt = 2k t 0.3 : S Saving...

1. Show that in the Solow model with land the exact (in contrast to the approximate), common growth rate gr of output per worker and of capital per worker in steady state is: gr = (1 + g)~/(~H) -- -...

Two countries, Richland and Poorland, are described by the Solow growth model. They have the same Cobb-Douglas production function, Y = AK a L 1 - , but with different quantities of capital and...

For Evergreen Environmental Engineering (EEE), determine the working capital, current ratio, and acidtest ratio. Evaluate the company's economic situation with respect to its ability to payoff debt....

There are multiple reasons for why the war of 1812 was started. Here i would like for you to take 2 to 3 reasons and explain why these were thought to be a reason for America to once again go to war...

( 1 point ) For what positive values o f k does the function y = s i n ( k t ) satisfy the differential equation y ' ' + 3 6 y = 0 ? For what negative values o f k does the function y = c o s ( k t )...

Swordfish Corporation reported pretax book income of $1,000,000. During the current year, the net reserve for warranties increased by $25,000. In addition, book depreciation exceeded tax depreciation...

Prezas Company's balance sheet showed total current assets of $3,250, all of which were required in operations. Its current liabilities consisted of $975 of accounts payable, $600 of 6% short-term...

Vasudevan Inc. recently reported operating income of $5.35 million, depreciation of $1.20 million, and had a tax rate of 40%. The firm's expenditures on fixed assets and net operating working capital...

1. Classify the following materials into elements, compounds, or mixtures. 1. gold 2. steel 3. paper 4. milk 5. cotton 6. mayonnaise 7. sand and stone 8. gasoline 9. sugar water 10. iron oxide 11....

What is an important reason to collect data continuously in NDBI? Group of answer choices To avoid misinterpretation based on a single event To create a paper trail for funding sources To satisfy...

Question 18 2 pts Real GDP per hour worked, Y/L pwpf 3 ( 7 ) , D ( * ) , - - - - pwpf 2 C - - pwpf, A B - - - - - (* ), (*), Capital per hour worked, K/L This graph contains three per-worker...

Question 78 (1 point) Real GDP per hour worked, Y/L Production $17,000 functiong 16,400 Production 16,000 functionz Production 15.000 function1 $50,000 60.000 70,000 Capital per hour worked, KIL An...

Figure 11-1 Real GDP per hour worked, YA Production function, Production function, Production function, $40 60 Capital per hour worked, 28. Refer to Figure 11-1. Diminishing marginal returns is...

Using the per-worker production function graph from Figures 22.3 and 22.4 on pages 738 and 740, show the effect on real GDP per hour worked of an increase in capital per hour worked, holding...

Using the per-worker production function with "capital per worker" on the x-axis and "output per worker" on the y-axis, answer the following questions: - Assume an influx of working-age immigrants...

When an economy faces diminishing returns, Select one: a. the per-worker production function shifts to the left. b. the per-worker production function shifts to the right. c. the slope of the...