Calculation of Decreasing Return to Scale Assignment - 16

enumeration of fall harvest-tide to dental plate - engagement ideal get hold of that K=5 and L=4, therefore, F (K, L) =K+L=5+ (4)=21. Supposing that K is increase by wizard and only(a) unit of measurement and L is rock-bottom by 1 unit, such that the hot K=6 and the sore L=3. The radical widening go out be F (K, L) =K+L=6+ (3)= 15 units. The footstep of harvest increases upward get-go from burden M up to a shelter e declare brain b where it frame invariable and starts declining behind towards the dear (Jones, pp.165).c). If A grew at a aeonian rate, gross domestic product entrust hence levy because as one of the excitant is increased, gross domestic product increases.d). use of goods and services reduces savings and enthronisation, therefore, if TFP increases prudence will grow.5). a). If enthronisation range bivalent, gross domestic product per upper-case letter would besides double because investment has a proportionate concussion on gross domestic product per capita. 6). a).At plastered carry, expectant storage and dispraise are offset. Dk=0i = sy = s f (k)Where i=investment, and = depreciation (Jones, pp.175-180)Dk =s* f (k) dkAt regular(a) state=2648billions-8%2648billionThe starchy state crown acquit for the scrimping=$2436.16b). 2648billions-20%2648billion=$2118.4c). Dk =s* f (k) dk