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1) Does a positive savings rate mean that capital per worker will definately rise over time ?

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 ?

 


 

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