What is the labor share and capital share of output

Assignment Help Econometrics

Reference no: EM13208528

Consider the following technology F(K,L) = (AK^?)(L^(1??)) where K is the level of capital, L is the level of labor or hours worked, A is a efficiency parameter and ? (0, 1)

(a) Write down the firms problem in the long-run. Note the price for capital and labor are respectively, r and w. (Normalize the price of output to be 1 so that w and r are in real terms).

(b) Does this production function depict constant return to scale? Prove it.

(d) What is the labor share and capital share of output?

Reference no: EM13208528

Questions Cloud

How to find the reservation wage : Consider an agent who lives two periods. He is unemployed at the beginning of the first period and has a wage offer of w. If he accepts the wage offer w, he will work forever at that wage. If he rejects the offer, he receives an unemployment benef..

Explain what is the ph at equivilance point : What is the pH at equivilance point? c. What is the pH of the solution when 106.4mL of 1.721 M NaOH has been added to the 0.591 M acetic acid solution?

How can persistently weak currencies be stabilized : Discuss the topic: "How can persistently weak currencies be stabilized?"Many countries suffer from chronical economic problems, such as high inflation, high unemployment, and large trade and budget deficits.

Explain how would prepare chloro-methyloctane : How would you prepare 2-chloro-2-methyloctane in a lab begining with 2-methyl-2-octene and hydrochloric acid? It is reacted over heat with Ch2Cl2.

What is the labor share and capital share of output : Write down the firms problem in the long-run. Note the price for capital and labor are respectively, r and w. (Normalize the price of output to be 1 so that w and r are in real terms). (b) Does this production function depict constant return to sca..

Explain how do you find the concentraton of an isotope : how do you find the concentraton of an isotope from its molarity and molecular weight with no other factors

Explain is the multiplier smaller or larger : Solve for equilibrium output. Illustrate the equilibrium in the ISLM diagram. What is the value of the multiplier Now let investment depend on both sales and the interest rate: I=b0+b1Y-b2i b. Solve for the equilibrium output (assume c1+b1

Prepare a draft report to the board of directors : Prepare a draft report to the board of directors which identifies and briefly explains and four main factors to be considered when deciding on the appropriate mix of short, medium or long-term debt finance for Source Ltd.

How might balance of political power influence state loss : The annual growth rate for the population in the state of West Virginia is one of the nation's lowest at 0.30%. Why do you think other states, for example, Virginia, have nearly four times this growth rate

User Account

All Pages