On the diagram above, show the quantity of consumption per worker in equilibrium
If the actual capital per worker were greater than k*, would consumption be higher or lower than it is in equilibrium? Describe what would happen in an economy with such a high level of capital per worker.
When capital per worker is above its equilibrium value, output per worker is higher, so each worker has more to consume. Total saving/investment is higher, as well, but not enough to replace the capital lost to depreciation. As a result, capital per worker is falling, which brings output and consumption down to their equilibrium levels.
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A) understand the technology before voting on defense. B) vote on issues without having complete information. C) gather information on issues that are not important. D) not vote on issues that they do not understand.
Because of the presence of asymmetric information problems in credit markets, an expansionary monetary policy causes a ________ in net worth, which ________ the adverse selection problem, thereby ________ increased lending to finance investment
spending. A) decline; increases; encouraging B) rise; increases; discouraging C) rise; reduces; encouraging D) decline; reduces; discouraging
Vertical integration often aims to
a. Prevent the retailers from defeating upstream price discrimination through arbitrage b. Avoid paying higher taxes c. Serve as a "signal" of the manufacturer's belief of the likely success of his product d. All of the above
The table above gives the demand for a monopolist's output. Between which two quantities is demand elastic?
A) 6 and 5 B) 5 and 4 C) 4 and 3 D) 3 and 2