Macroeconomics

posted by .

Can someone point me in the right direction on how to solve this?

1. Suppose you have an economy with two factors of production (capital and labor), and suppose that capital's share of national income is 40% and that labor's share is 60%. Assume also that the annual growth rates of labor and capital are, respectively, 5% and 3%.
A. If technology does not increase over time, how much does output grow each year?

B. If technology grows at a 2% rate each year, how much does output grow each year.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    In an economy where a unit of labour can produce either 1 unit of x or 4 units of y (or any linear combination of the two) and a unit of capital can produce either 4 units of x or 1 unit of y (or any linear combination of the two). …
  2. AP Economics

    Identify land, labor and capital as the three factors of production and give examples. I have explained about land. can someone please help me with labor and capital?
  3. A.P. Economics (Please check if I'm right)

    Leaving class today, you decide to start an economics tutoring business. Your first step is to get the two categories of capital. Next you need to obtain the other factors of production. Specifically, what do you need in terms of land, …
  4. Economics

    B. Suppose there are two goods, Cloth and Food, and two factors of production, labour and capital. Suppose that the production function for each good is "homothetic". Put capital K in the vertical axis and labour L in the horizontal …
  5. government

    This one i am stuck between A and B i need help. Which correctly lists the three factors of production in a capitalist economy?
  6. macroeconomics

    Can someone point me in the right direction on how to solve this?
  7. economics

    If capital’s share of income is 25% and labor’s share of income is 75%, the stocks of both capital and labor increase by 50% (K/K = N/N = 0.5), and there is no technology growth, at what rate will potential output …
  8. Economics

    A Cobb-Douglas production function for new company is given by  f(x,y)  50x 2 5 y 3 5 where x represents the units of labor and y represents the units of capital. Suppose units of Labor and capital cost $100 …
  9. U.S. Gov. & Economics

    Which correctly lists the three factors of production in a capitalist economy?
  10. Macroeconomics help!

    Consider the following simplified economy described by a Cobb-Douglas production function with three factors of production: “K” is physical capital (the number of machines), “L” is labor (the number of workers), and “H” …

More Similar Questions