Solow Model- DSE!

[Arushi1]

http://econdse.org/wp-content/uploads/2014/03/QP-MA-Option-A-2013.pdf

Heyyy!
Please tell me your answers for the last 5 questions.

Much thanks :)

[Akshay Jain]

56-b
57-c
58-b
59-a
60-a

[Arushi1]

Thanks Akshay! :)

[ashutosh]

@akshay
shudnt 56 be d.
not b because if alpha, beta<1 that implies diminishing returns to both factors

and d because neoclassical model assumes that factors are imperfect substitutes and not perfect substitutes. (the linear equation shows here that factors are perfect substitutes.)

[Shefali]

Pls help me with quest 58.how to find capital acc per worker?

[Granpa Simpson]

@Shefali: Capital Accumulation per worker is (dk/dt), now we know that (dk/dt)=(I)-(n+d)*k, where I=s*f(k)...now here d=0, and S*f(k)= s*α*k+s*β
Therefore, dkt/dt= s*α*k+s*β-n*k

[Shefali]

Subhayu...i still didnt get...

[Granpa Simpson]

Capital Accumulation means growth of capital per worker over time which means (dk/dt), now capital accumulation on one hand is enhanced by investment, on the other hand it declines by the rate of depreciation of capital and labor growth rate (here labor growth rate is n and depreciation is zero). Thus (dk/dt)= I-n*k...now using saving investment identity I=s*y=s*f(k)..use this and u will get the answer..!!!!

[Shefali]

Thanx Subhayu..got it