Final answer:
The new steady-state value of the capital-labor ratio cannot be determined without additional economic parameters such as savings rate, depreciation rate, and population growth rate. The concept of steady-state relates to a situation in a Solow growth model where the economy's capital per worker and output per worker are constant because investment equals depreciation.
Step-by-step explanation:
To answer the question about the new steady-state value of the capital-labor ratio, given the per-worker production equation yt = 5kt^0.5, we must refer to the concept of steady-state in a Solow growth model. The steady-state is a situation where the capital per worker (k) and output per worker (y) do not change because investment is exactly replacing depreciation. Without the savings rate, depreciation rate, and population growth rate, we cannot pin down the exact steady-state value of the capital-labor ratio with the given production function.
In the context provided, where a firm is initially equipped with enough business for one typist and one PC, if demand suddenly increases, the firm cannot instantly adjust its capital (in this case, PCs) to meet the demand in the short term. However, in the long run, the firm can adjust both labor and capital to reach a new equilibrium.
The steady-state value of the capital-labor ratio in such a production function would be dictated by the rates of saving, depreciation, and growth in the labor force and can be more thoroughly analyzed using the Solow growth model. An understanding of the dynamics of the capital-labor ratio is crucial for businesses and economies to maximize their production efficiently and sustainably.