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2. Suppose that output in each country is produced by a representative firm. In the first period, the representative firm in country i produces output

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2. Suppose that output in each country is produced by a representative firm. In the first period, the representative firm in country i produces output Y, by operating the Cobb- Douglas technology: F(Ki, Ni) = z;K. (Na) 1-e where d c (0, 1), z; is total factor productivity, K; is the capital stock, and No is labour demanded in the first period. The firm chooses labour demand based on the optimality condition FN(K;, N") = w;. Show that this optimality condition boils down to Wi = (1-0) Yi Na (2)

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