Q1. Let's think about two countries, Frugal and Smart. In Frugal, people devote 50 percent of GDP to making new investment goods, so = 0.5, and their production function is Y. In Frugal, people devote 25 percent of GDP to making new investment goods, so = 0.25, and their production function is Y = 2. Both countries start off with K = 100. What is the amount of consumption in each country this year?

Q2. As vice president of sales for a rapidly growing company, you are grappling with the question of expanding the size of your direct sales force (from its current level of 60 national salespeople). You are considering hiring from 5 to 10 additional personnel.