Assume that a country's per-worker production is y = k1/2, where y is output per worker and k is capital per worker. Assume also that 10 percent of capital depreciates per year (δ = 0.10).
a) If the saving rate (s) is 0.4, what are capital per worker, production per worker, and consumption per worker in the steady state?
b) Solve for steady-state capital per worker, production per worker, and consumption per worker with s = 0.6.
c) Solve for steady-state capital per worker, production per worker, and consumption per worker with s = 0.8.
d) Is it possible to save too much? Why?