Suppose the aggregate production function takes a Cobb-Douglas form. That is, q = Ak, where q...

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Suppose the aggregate production function takes a Cobb-Douglas form. That is, q = Akº, where q is GDP per worker, k is capital per worker, A is the level of productivity, and is the share of capital income. For Ganda and the US, we have the following information: ¶Ganda qus = 0.11 kGanda kus jª E = 0.04 (1) Assume that the share of capital income is in both countries. With implied productivity difference between the two countries, Acanda, what would be the output per worker ratio Ganda if the marginal product of capital were to eventually equalize in the two countries? Show your derivation as well as the answer. (6 marks) Aus QUS Suppose the aggregate production function takes a Cobb-Douglas form. That is, q = Akº, where q is GDP per worker, k is capital per worker, A is the level of productivity, and is the share of capital income. For Ganda and the US, we have the following information: ¶Ganda qus = 0.11 kGanda kus jª E = 0.04 (1) Assume that the share of capital income is in both countries. With implied productivity difference between the two countries, Acanda, what would be the output per worker ratio Ganda if the marginal product of capital were to eventually equalize in the two countries? Show your derivation as well as the answer. (6 marks) Aus QUS

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To find the implied productivity difference between Ganda and the US AGanda we AUS can use the provi... View the full answer