If f(k) = 6k^0.5, s = 0.1, n = 0.1, and d = 0.2, what is the value of c (consumption) at equilibrium?

Question

Quizplus · Accepted Answer

To find the consumption at equilibrium, we need to solve for k such that f'(k) = 0. f'(k) = 6^0.5 - (n + d + s) = 0 6^0.5 = n + d + s = 0.4 Solving for k: k = (0.4)/(6*10.5) = 0.00635 Now we can find the consumption at equilibrium: c = f(k) - dk = 6(0.00635)(1-0.1-0.1-0.1-0.1)(1-0.2)/(0.2) ≈ 10.8 Therefore, the best choice is C.

If F(k) = 6k0

If F(k) = 6k⁰