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Consider an economy described by the production function: Y=F(K,L)= K3/10 L7/10. a. What is the per worker production function? b. Assuming no population growth or technological progress, find the steady state capital stock per worker, output per worker, and consumption per worker as a function of the savings rate and the depreciation rate. (Hint: Your answer will be in terms of the variables s and δ.) c. Assume the depreciation rate is 10%. Make a table showing steady state capital per worker, output per worker, and consumption per worker for savings rates of 0%, 10%, 20%, 30%....all the way to 100%. What savings rate maximizes output per worker? What savings rate maximizes consumption per worker?
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As an individual consumes more of a product within a given period of time, it is likely that each additional unit consumed will yield
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