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5. For a country, its national output or income (Y) follows a Cobb-Douglas function as below. For example, the function in 2019 is Y2019 =

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5. For a country, its national output or income (Y) follows a Cobb-Douglas function as below. For example, the function in 2019 is Y2019 = AKL1-a = 2KaLi-a. Here K indicates total capital input and L is total labor input. And we have a = 0.3. Coefficient of technology, A (total factor of productivity) is 2 in production function. What is the share of capital and labor of total national income? If K is 36 (unit) and L is 100 (unit), how much was the total output in 2019? 6. Following Question 5, the pandemics of Coronavirus has created an unprecedented economic crisis internationally in 2020. The Covid-19 has damaged total national output of the country in Question 5 via several channels, including a supply shock, a demand shock and a historical financial shock. The influence of this heath crisis varied by industries and across subsectors of an industry. During the crisis, high personal saving rate delayed capital accumulation, though fiscal stimulus packages repaired some disrupted credit intermediation. However, total capital stock (K) grew slowly at 5% in 2020. In the labor market, damage caused by Covid-19 has been the most severe one in recent years. Due to economic shutdown and laid-off, the crisis substantially lowered labor participation and labor supply. Compared with 2019, total labor stock (L) fell 20% in 2020. The only noticeable progress was achieved in 2020 was a decent increase of total factor productivity (factor A). It increased from 2 in 2019 to 2.2 in 2020. According to the information as above, how much GDP of this country would be in 2020, if we assume a is the same value as in Question 5. Your forecast can be based on the level of 2019 (as percentage change). 7. Recall the production function, to maximize profit, a producer should make sure that the real wage of a worker should be equal to his or her marginal product of labor (MPL). Number of Total Number of labor Total output /h labor 10 pizzas output 18 pizzas 31 pizzas 25 pizzas 36 pizzas 38 pizzas Suppose the MPL of workers in a pizza shop as above. The table shows the total output of pizzas

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