Suppose the Productivity Function Is Given by

question 126

Essay

Suppose the productivity function is given by
.
(A)Draw a graph that shows the relationship between productivity and capital per hour of work. What assumption are you making about the returns to capital? Please explain.
(B)Pick an initial point on your productivity function and label the points
and

(C) Fill in the four blanks in the following table.

D) For growth scenario 1, label the new levels of productivity and capital per hour of work on your graph. Explain briefly.

(E)For growth scenario 3, label the new levels of productivity and capital per hour of work on your graph. Please draw a separate graph for this part. Explain briefly.

(F)For each of the four scenarios, identify whether labor and capital are growing at the same rate, whether labor is growing faster than capital, or whether capital is growing faster than labor.

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Definitions:

Soleus

A powerful muscle in the calf of the leg that is involved in standing and walking, lying beneath the gastrocnemius muscle.

Sternocleidomastoid

The sternocleidomastoid is a muscle in the neck that runs from the sternum and clavicle to the mastoid process of the temporal bone, involved in head movement.

Orbicularis Oculi

A circular muscle that surrounds the eyelid, allowing it to close or blink.

Masseter

A facial muscle that plays a major role in the chewing of food by raising the lower jaw towards the upper jaw.