This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 1 Economics 101 In-Class Exercise #3 Answers Romer Model Department of Economics Professor Siegler UC Davis Summer 2009 Consider two countries that are described by the Romer growth model: (Output production function) (Ideas production function) (Resource constraint) (Allocation of labor) The following exogenous parameters are the same in both countries: 250, 1 4,000 0.00025, 2,000 The only difference between the two countries is that Country B has a larger share of researchers than does Country C. In Country B, 8 percent of the population are researchers in the ideas producing sector, while in Country C only 4 percent of the population are researchers ( 0.08 0.04 ). A. What is the level of output per capita in Country B and Country C in year 0? Which country produces more goods and services per person in year 0? country produces more goods and services per person in year 0?...
View Full Document
This note was uploaded on 08/09/2009 for the course ECON 101 taught by Professor Miyanishi during the Summer '08 term at UC Davis.
- Summer '08