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Aquaria is a small island country that specializes in the production of yachts. It has a ...

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Aquaria is a small island country that specializes in the production of yachts. It has a ...

Aquaria is a small island country that specializes in the production of yachts. It has a Cobb-Douglas aggregate production function.
a) How will the production of yachts be affected if the technology used in the production of yachts in Aquaria improves?
b) How will Aquaria's output be affected if both the efficiency units of labor and the physical capital stock increase by 12.5 percent, but the level of technology remains unchanged?

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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