1) Does a positive savings rate mean that capital per worker will definately rise over time ? Explain why or why not.
2) Assume Y = A*K.6*L.4
a) In equation form- what is the marginal product of capital ?
b) In equation form what is the marginal product of labor ?
c) How do we know that each is diminishing.
d) Prove that if you double capital and labor Y doubles.
e) What is the characteristic described in d called in words ?