Consider the following production function y 9k13 l23

Reference no: EM13392957

1.Consider the following production function: Y = 9K1/3 L2/3, where the level of capital in the economy is 100 and the level of labor in the economy is 100.

a) Compute the equilibrium real wage and real rental rate on capital.
b) Compute the total payments to labor and that to owners of capital.
c) Show that Euler’s theorem holds here, that the sum of total payments to labor and capital equals total production.
d) What fraction of total production goes to paying labor; what fraction toward paying capital? Do you see a shortcut to get these shares by looking at the production function?
e) Suppose that an increase in immigration into the U.S. increases the U.S. labor force. Discuss the effect on the real wage and the real rental price of capital. Would workers currently in the U.S. be happy about the immigration? How about owners of U.S. factories?

Reference no: EM13392957

Questions Cloud

Compute total cost and the average total cost and add it to : you are the owner of a small bread factory and are thinking of lowering costs and expanding. your small-business

Given that you are rolling your services out in a foreign : given that you are rolling your services out in a foreign country there will be a need to learn from other companies

Two firms compete in emerging market for energy drinkscold : two firms compete in the emerging market for energy drinkscold medicine hybrids that feature caffine alcohol and cough

Determine the key approaches that you will use in order to : imagine that you are a marketing manager in charge of developing a marketing campaign for lenovo computers.your company

Consider the following production function y 9k13 l23 : 1.consider the following production function y 9k13 l23 where the level of capital in the economy is 100 and the level

After developing your bid you need to create a proposal : 1.in a situation where conditions dont allow you to make a fixed-dollar bid you should2.when estimating on a computer

Deduce profit maximizing number of seats to give on this : southwest airlines is by far the low cost carrier on the sacramento to los angeles air travel route. their marginal

Uing the same company that you have using in previous : using the same company bank of america that you have using in previous weeks please review its cashflow sheet the

Gven that there are 5 identical countries each with a tcq : you are the oil minister of one of 5 key opec countries. the world demand for oil can be reduced to q 100 - p and

User Account

All Pages