Consider the Cobb-Douglas Production Function

question 8

Essay

Consider the Cobb-Douglas production function
.
(a)Write this in growth-rate terms.
(b)Next,define this in terms of per capita growth and identify the contributions of the components of per capita growth.
(c)If the growth rate of capital per worker is 1.3 percent;the labor composition growth rate is 0.4 percent,TFP growth is 1.2 percent;and a = 1/2,what is the growth rate of output per worker? If a = 1/3?

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Definitions:

Binding Price Floor

A legally established minimum price above the equilibrium price, causing a surplus in the market.

Hybrid Cars

Vehicles powered by a combination of an internal combustion engine and one or more electric motors, utilizing both fuel and electricity.

Consumer Surplus

The gap between what consumers are prepared to pay for a good or service and what they actually do pay.

Binding Price Floor

A minimum price set by the government for certain goods and services that is above the equilibrium price, causing a surplus.