Question

If the per-worker production function is given by y = k1/2, the

saving ratio is 0.3, and the depreciation rate is 0.1, then the
steady-state ratio of output per worker (y) is ________

Answer 1

The steady-state ratio of output per worker (y) in this case is 3.

Step-by-step explanation:

In this case, the question is asking for the steady-state ratio of output per worker (y) given the per-worker production function y = k^1/2, a saving ratio of 0.3, and a depreciation rate of 0.1.

To find the steady-state ratio of output per worker, we need to find the capital per worker (k) at the steady state. At the steady state, the investment per worker (s*y) is equal to the depreciation per worker (d*k), where s is the saving ratio and d is the depreciation rate.

Using the given values, we have 0.3*y = 0.1*k^1/2. Solving for k, we get k = (0.3/0.1)^2 = 9.

Substituting k = 9 into the production function y = k^1/2, we get y = 9^1/2 = 3. Therefore, the steady-state ratio of output per worker (y) is 3.