Determine the wage of labor, Microeconomics

Consider a hypothetical nation, Solowland, which were in the steady state. We consider a constant return to scale production function based on two production factors, labor and capital. The Solowland government recently took policy measures to support family with children. As a result, Solowland undergoes an increase in the population growth rate and it will remain high over time. Complete the table below for the effects (direction only, not size, such as "increased", "decreased", "unchanged", and "ambiguous") of higher population growth rate on

i. the wage of labor, w (hint: it is determined by marginal product of labor)

ii. the rental rate, r (hint: it is determined by marginal product of capital)

iii. capital per worker, k

iv. income per worker, y

v. consumption per worker, c

both initially (the instance of an increase in the growth rate of labor force) and in the new steady state, as compared to the previous steady state (before the increase in the population growth rate). Then, support your answer in words and/or figure. There have been and will be no changes in the savings rates, and depreciation rates. We disregard exogenous technological progress (g=0). (200 words)

 

Initially

New Steady State

i. the wage of labor, w

 

 

ii. the rental rate, r

 

 

iii. capital per worker, k

 

 

iv. income per worker, y

 

 

         v. consumption per worker, c

 

 

Posted Date: 3/7/2013 4:25:53 AM | Location : United States







Related Discussions:- Determine the wage of labor, Assignment Help, Ask Question on Determine the wage of labor, Get Answer, Expert's Help, Determine the wage of labor Discussions

Write discussion on Determine the wage of labor
Your posts are moderated
Related Questions
What are the possibilities of returns to scale in production technology? Three possibilities are there as: technology exhibits (a) constant returns to scale; (b) decreasing ret

discuss whether marginal utility is a realistic piece of economy analysis in a consumer demand

i need to find Profitability, Earning capacity, Capital structure, Robustness from annual reports. Not a long job..

Give a critique of indifference curve

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

discuss the central economic problem facing survivor group

Discuss about the language and methods of mathematics in modern economics. Language and Methods of Mathematics: This section reviews some fundamental mathematics results

Separate Administrative Set-up for Exports:   It may be worth examining the setting up of Foreign Trade Board, similar to what obtains in Japan (JETRO) and South Korea (KETRO)

What is meant by the multifaceted nature of the U.S. health care system? How is health care financed in the U.S.? What is the advantage and disadvantage of the U.S. multi-payer sys