midterm2010F - ECO325F: Mid-Term Examination October 2010...

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ECO325F: Mid-Term Examination October 2010 Duration: 2 hours NO AIDS ALLOWED Note to student: Enter your name and student number on each examination book that you use. There are five questions on this test for a total of 100 marks. Read each question carefully and note the number of points allocated to each part. Good Luck. 1. (Total 12 points)What conditions are put on the intensive form of the production for the Solow model and what is the economic interpretation of these conditions? 2. (Total 8 points) Which of the following functions are constant returns to scale in total capital, K t , and total effective labour, A t L t ? Justify your answer. a. (4 points) F K t , A t L t  Z K t  A t L t  1 ,whe re Z is a positive constant b. (4 points) F K t , A t L t  K t A t L t 3. (Total 14 points) a. (2 points) What is the expression that describes the path of convergence of capital per unit of effective labour in the Solow model? b. (2 points) What is the expression that describes the path of convergence of output per unit of effective labour in the Solow model?
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This note was uploaded on 09/11/2011 for the course ECO 325 taught by Professor G. during the Spring '09 term at University of Toronto- Toronto.

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midterm2010F - ECO325F: Mid-Term Examination October 2010...

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