Consider the following CobbDouglas production function and SolowSwan model. Cobb-Douglas: Y = F(K, L) = AKGLPC' SolowSwan: Y; = Fug, L.) 2 AKng0 1.

 1. Show the effect of a decrease in population due to emigration in the Cobb-Douglas function using graphs.

Explain the impact on output, real wages and real rental rates in the economy.

2. What effect does emigration have on steady state capital stock in the standard Solow-Swan model? Explain.

3. What effect does emigration have on steady state GDP per capita in the standard Solow-Swan model? Explain.