Given the following production function Y=AKα L 1-α Where; Y is the total output of the economy K is the amount of land, and L is the labor force of the economy Assume A=1 and = 0.5 The initial values of K and L is 100 units. a. How much output does the economy produce? b. What are the wage and rental price of land? c. What share of output does land receive?
Given the following production function Y=AKα L 1-α Where; Y is the total output of the economy K is the amount of land, and L is the labor force of the economy Assume A=1 and = 0.5 The initial values of K and L is 100 units. a. How much output does the economy produce? b. What are the wage and rental price of land? c. What share of output does land receive?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
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Problem 10RQ: Give the three reasons that explain why the division of labor increases an economys level of...
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Q 1. Given the following production function
Y=AKα L 1-α
Where;
Y is the total output of the economy
K is the amount of land, and
L is the labor force of the economy
Assume A=1 and = 0.5
The initial values of K and L is 100 units.
a. How much output does the economy produce?
b. What are the wage and rental price of land?
c. What share of output does land receive?
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