Problem: Suppose that the economy's production function is given by Y=K^QN^1-Q  . This production function is called a Cobb Douglas production function. Assume that Q=1/3

Required:

1. Transform the production function into a relation between output per worker and capital per worker

2. For a given saving rate (s) and depreciation rate (d ), give an expression for capital per worker in the steady state

3. Give an expression for output per worker in the steady state

4. Solve for the steady level of output per worker when d =0.08 and s=0.32

5. Suppose that the depreciation rate remains constant at d =0.08, whereas the saving rate is reduced by half to s=0.16. What happens to the steady state level of output per worker?