Part 1What are the key assumptions of the Solow growth model?
Part 2 What are the shortcomings of using the production model Y= K 1/3 ? What might we include in our model to improve the fit of this simple model?
Part 3 Consider the production function: Y=( X-500 )/20 , where Y is output and X represents inputs. Graph this production function. Does it display decreasing, constant, or increasing returns to scale?