Question

page(s) 398-399 12.2 what is the solow growth model? seth is trying to decide how many workers is the optimal amount at his factory, which produces artisan-crafted grooming products. he observes the following: when there is one worker, 10 hairbrushes are produced daily. when there are two workers, 16 hairbrushes are produced daily. when there are three workers, 20 hairbrushes are produced daily. what is the marginal product of the third worker?

Answer 1

An exogenous model of economic growth, the Solow Growth Model examines how population growth, savings growth, and technological advancement rates affect changes in an economy's output level over time.

What is the graph of the Solow growth model?

The Solow line graph exemplifies the model's concept. The graph has an x-axis, a y-axis, and three lines. One line represents depreciation, another represents savings or investments, and yet another represents output per laborer or individual within the labor force. The lines converge at the country's steady state.

Calculation:

The marginal product of each additional labor unit can be calculated by dividing the total change in output by the change in labor.

Change in output after adding a third labor unit = 20-16 = 4.

Change in output / Change in labor = Marginal product

4 / 1 = 4 units are the marginal product.

As a result, the marginal product of the third labor unit equals four hairbrushes.

Learn more about the Solow growth model with the help of the given link:

brainly.com/question/16243862

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