It can be shown that if a neoclassical production function with CRS has a constant elasticity of factor substitution different from one, it must be of the form = [ + (1 ) ] 1 , where A, , and are parameters satisfying A > 0, 0 < < 1, and < 1. This function has been used intensively in empirical studies and is called a CES production function (CES for Constant Elasticity of Substitution).

A) Show this production function exhibits constant returns to scale.

B) Solve for capital per worker and output per worker in steady state.

C) Find the saving rate that maximizes consumption at the steady state.