6) (6pts) Classical Model : Assume the following production function Y=10K 1/41 3/4 and that the amount of labor increases by 40%. a) (2pts)How much
6) (6pts) Classical Model : Assume the following production function Y=10K 1/41 3/4 and that the amount of labor increases by 40%. a) (2pts)How much will total output increase? b) (2pts) What will happen to rental rate of capital? Briefly state why. c) (2pts) What will happen to the wage rate? Briefly state why
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