Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 3, Problem 4QR
To determine
Cobb‑Douglas production function.
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Students have asked these similar questions
Which of the following do economists consider to be capital?
Multiple Choice
a pair of stockings
a construction crane
a savings account
a share of IBM stock
The term capital, as used by economists, refers to
a
money
b
the physical space in which production occurs
c
the time allocated to producing goods and services
d
financial securities such as stocks and bonds
e
machinery and equipment that is not used up during the production process
Write the production function in its simplest form (human capital being included in TFP) and explain the nature of each factor as well the theoretical value of the parameter Alpha. In other words what does the value of Alpha represent regarding the returns of each factors of production?
Chapter 3 Solutions
Macroeconomics
Ch. 3 - Prob. 1QQCh. 3 - Prob. 2QQCh. 3 - Prob. 3QQCh. 3 - Prob. 4QQCh. 3 - Prob. 5QQCh. 3 - Prob. 6QQCh. 3 - Prob. 1QRCh. 3 - Prob. 2QRCh. 3 - Prob. 3QRCh. 3 - Prob. 4QR
Ch. 3 - Prob. 5QRCh. 3 - Prob. 6QRCh. 3 - Prob. 7QRCh. 3 - Prob. 8QRCh. 3 - Prob. 1PACh. 3 - Prob. 2PACh. 3 - Prob. 3PACh. 3 - Prob. 4PACh. 3 - Prob. 5PACh. 3 - Prob. 6PACh. 3 - Prob. 7PACh. 3 - Prob. 8PACh. 3 - Prob. 9PACh. 3 - Prob. 10PACh. 3 - Prob. 11PACh. 3 - Prob. 12PACh. 3 - Prob. 13PACh. 3 - Prob. 14PA
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- Explain why the AVC curve is "U shaped"?arrow_forwardConsider the effects of taxes imposed on both labor and capital income. The production function takes the standard Cobb-Douglas form: Y = K“ (AN)¯ª The tax rate equals 7, saving rate equals s, the rate of technological progress = g, capital depreciation rate = d, and population growth rate = n. The government spends tax revenues on consumption goods, so that government savings are equal to 0. a) Write down the production function in the intensive form. Use the dynamic equation for capital per units of effective labor to compute the value of consumption per units of effective labor in the steady state. b) Compute the golden rule saving rate in the Solow growth model extended to include taxes. Use the Basic Solow growth graph with the saving and production functions drawn against k, to illustrate the consequences of a rise in the tax rate t. What is the rate of growth of per capita income in the steady state? Does it depend on the tax rate? c)arrow_forward0.5 0.5 Given a production function: Y = AK N If output grows at 5%, capital grows at 2% and the number of workers grows at 4%, then technology (or total factor productivity) grows at % ? (Answer in integer only, no decimal place.) Your Answer: Answer Given a production function: Y = AK0.5 N0.5. If output grows at 5%, capital grows at 2% and the number of workers grows at 4%, then technology (or total factor productivity) grows at %? (Answer in integer only, no decimal place.) Your Answer: Answerarrow_forward
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