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Answer :
Final answer:
The change in capital stock per worker (Δk) can be expressed as a function of the saving ratio (s), output per worker (f(k)), existing capital per worker (k), and the depreciation rate (δ). This equation is relevant in economics, specifically in understanding the dynamics of capital and output in a company or economy.
Explanation:
The question is asking about an equation derived from the economic production function related to capital stock per worker. This production function, represented as Δk = s * f(k) - δk, explains the relationship between output per worker (f(k)), capital per worker (k), saving ratio (s), and the depreciation rate (δ). In simple terms, this equation implies that the change in capital stock per worker depends on the saving ratio, output per worker, and capital per worker, while considering the depreciation rate of the capital stock.
An example may help to understand this better. Let's consider a company that has a saving ratio of 0.2, output per worker that could be represented as f(k) = 10k^0.5, a capital depreciation rate of 0.5, and the current capital per worker as 100. Substituting these values in the equation, we get Δk = 0.2 * (10*100^0.5) - 0.5*100. This would give us the change in capital per worker for this particular company.
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