Consider a numerical example using the Solow growth model. Suppose that F(K, N) = K^ 0.5N^ 0.5, with d = 0.1, s = 0.2, n = 0.01, and z = 1, and take a period to be a year.
(a) Determine capital per worker, income per capita, and consumption per capita in the steady state.
(b) Now, suppose that the economy is initially in the steady state that you calculated in part (a). Then, s increases to 0.4.
i. Determine capital per worker, income per capita, and consumption per capita in each of the 10 years following the increase in the savings rate.
ii. Determine capital per worker, income per capita, and consumption per capita in the new steady state.
iii. Discuss your results; in particular comment on the speed of adjustment to the new steady state after the change in the savings rate, and the paths followed by capital per worker, income per capita, and consumption per capita.

In march 2012, the state of california started requiring that all packaging for food and drink with the additive 4-methylimidazole (4-mi) be clearly labeled with a cancer warning. because of this, both pepsi and coke changed their formula to eliminate 4-mi as an ingredient. if pepsi and coke did not change their formula, holding all else constant, what would have happened to the demand for these goods, assuming pepsi and coke were in a competitive market? a. the demand curve for both pepsi and coke would have shifted to the right, causing the price of both products to decrease and the profits for the companies to fall. b. the demand curve for pepsi and coke would have remained unchanged, but the price of both products would have decreased and the profits for the companies would have fallen. c. the demand curve for pepsi and coke would have decreased, but the prices and profits would not have changed. d. the demand curve for only one of them would change because pepsi and coke are substitutes. e. the demand curve for pepsi and coke would have shifted to the left, causing the price of both products to decrease and the profits for both companies to fall.