You are given the production function Y= AK H14 N 2, where A = 4. The populationgrowth rate n is 0.025, the depreciation rate d is 0.075 (both physical and human capitaldepreciate at the same rate), and the growth rate of autonomous factors is zero.Investment 1 is the sum of two components, investment in physical capital Ig andinvestment in human capital Iµ. The fraction of GDP that goes to physical capitalinvestment is SK = 0.05 and the fraction of GDP that goes to human capital investment isSH = 0.05.(i)Convert the production function to a function relating Y/N to both K/N and H/N.(ii)Find the steady-state physical capital-labor ratio and the steady - state humancapital - labor ratio.(iii)Find the steady – state per person output.2.

Production function:Production is a function of land labor capital and entrepreneurship. It includes…

You are given the production function Y= AK 14H14 N 12, where A = 4. The population growth rate n is 0.025, the depreciation rate d is 0.075 (both physical and human capital depreciate at the same rate), and the growth rate of autonomous factors is zero. Investment I is the sum of two components, investment in physical capital Ik and investment in human capital In The fraction of GDP that goes to physical capital investment is SK 0.05 and the fraction of GDP that goes to human capital investment is SH = 0.05. (i) (ii) Convert the production function to a function relating Y/N to both K/N and H/N. Find the steady-state physical capital-labor ratio and the steady-state human capital - labor ratio. Find the steady-state per person output.

You are given the production function Y= AK 14H14 N 12, where A = 4. The population growth rate n is 0.025, the depreciation rate d is 0.075 (both physical and human capital depreciate at the same rate), and the growth rate of autonomous factors is zero. Investment I is the sum of two components, investment in physical capital Ik and investment in human capital In The fraction of GDP that goes to physical capital investment is SK 0.05 and the fraction of GDP that goes to human capital investment is SH = 0.05. (i) (ii) Convert the production function to a function relating Y/N to both K/N and H/N. Find the steady-state physical capital-labor ratio and the steady-state human capital - labor ratio. Find the steady-state per person output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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